Digital Health IPOs Revisited_How Are We Doing

Digital Health IPOs Revisited How Are We Doing?

Rick BebermanJuly 2015

Overview

Slides Developed By Rick Beberman

There are 14 IPOs of venture-backed digital health companies, since the 2009 HITECH Act, including six within the past seven months.*

* I’ve excluded later-stage private equity-backed companies such as IMS Health, Team Health, Emdeon, and Press Ganey, as well as companies that are not venture-backed such as Inovalon.

Medidata Solutions Imprivata Accretive Health Connecture Epocrates Invitae Vocera Evolent Health Veeva Systems Fitbit Castlight Health Mindbody Everyday Health Teladoc

Overview(cont’d)

Slides Developed By Rick Beberman

Average time from Series A to IPO is just over seven years, down from eight when I did this report in November.

Only two – Veeva and Fitbit – had meaningful earnings at the IPO.

Seven – Medidata, Veeva, Imprivata, Connecture, Evolent, Fitbit, and Teladoc – currently trade above their IPO price, although three have been trading for a month or less.

Six – Medidata, Veeva, Connecture, Evolent, Fitbit, and Teladoc - exceed the S&P 500.

Sapphire Ventures (formerly SAP Ventures) and Venrock are the most active VCs, with two IPOs each.

Overview(cont’d)

• The number of digital health IPOs is expected to ramp-up in the coming years given maturation of the industry and increasing amounts of investment in the space.

• Aftermarket performance of IPOs has improved since November with four of the six outperforming the S&P. If this continues, and one hopes it does given the short trading history of these stocks, it provides much incentive for VCs to continue supporting the industry.

Slides Developed By Rick Beberman

Medidata Solutions

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Date of first funding: 2002

IPO Date/Price: June 25, 2009/$7.00 (adjusted for stock split 12/2013)

Price (7/7/2015): $53.60

VCs: Milestone Venture Partners, Insight Venture Partners, Stonehenge Growth Capital, Silicon Alley

Brief Description: Software to manage clinical trial data

0%

100%

200%

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500%

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700%

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900%

6/25/2009 5/25/2010 4/25/2011 3/25/2012 2/25/2013 1/25/2014 12/25/2014

Medidata Return Relative To S&P 500

Medidata S&P 500

Accretive Health

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Date of first funding: 2004

IPO Date/Price: May 20, 2010/$12.00

Price (7/7/2015): $5.41

VCs: Ascension Health Ventures

Brief Description: Revenue cycle management services

-100%

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0%

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200%

5/20/2010 1/20/2012 9/20/2013 5/20/2015

Accretive return Relative To S&P 500

Accretive S&P 500

Epocrates

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Date of first funding: 1998

IPO Date/Price: February 2, 2011/$16.00

Price (1/7/2013): $11.75 (Acquisition price by athenahealth)

VCs: Bay City Capital, DFJ, InterWest, Three Arch, Sprout

Brief Description: Drug and formulary reference

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-80%

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Epocrates Return Relative To S&P 500

Epocrates S&P 500

Vocera

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Date of first funding: 2006

IPO Date/Price: March 28, 2012/$16.00

Price (7/7/2015): $11.61

VCs: Vanguard Ventures, Venrock, RRE Ventures, Avalon Ventures, Thomas Weisel, Golden Gate Ventures, Motorola

Brief Description: Communications solutions for providers

-60%

-40%

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120%

3/28/2012 10/28/2013 5/28/2015

Vocera Return Relative To S&P 500

Vocera S&P 500

Veeva Systems

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Date of first funding: 2008

IPO Date/Price: October 16, 2013/$20.00

Price (7/7/2015): $28.38

VCs: Emergence Capital Partners

Brief Description: Cloud-based software solutions for life science

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120%

10/16/2013 2/16/2014 6/16/2014 10/16/2014 2/16/2015 6/16/2015

Veeva Return Relative To S&P 500

Veeva S&P 500

CastlightHealth

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Date of first funding: 2009

IPO Date/Price: March 14, 2014/$16.00

Price (7/7/2015): $7.41

VCs: Venrock, Oak Investment Partners, Maverick Capital, USVP, Cleveland Clinic, Wellcome Trust

Brief Description: Price and quality transparency

-60%

-50%

-40%

-30%

-20%

-10%

0%

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20%

3/14/2014 6/14/2014 9/14/2014 12/14/2014 3/14/2015 6/14/2015

Castlight Return Relative To S&P 500

Castlight S&P 500

EverydayHealth

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Date of first funding: 2003

IPO Date/Price: March 28, 2014/$14.00

Price (7/7/2015): $12.37

VCs: Rho Ventures, Scale Venture Partners, Foundation Capital

Brief Description: Digital health and wellness content

-15%-10%

-5%0%5%

10%15%20%25%30%35%

3/28/2014 6/28/2014 9/28/2014 12/28/2014 3/28/2015 6/28/2015

Everyday Health Return Relative To S&P 500

Everyday Health S&P 500

Imprivata

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Date of first funding: 2002

IPO Date/Price: June 25, 2014/$15.00

Price (7/7/2015): $15.25

VCs: General Catalyst, Highland Capital, Polaris Partners, Sapphire Ventures

Brief Description: Single sign-on for health care providers

-15%

-10%

-5%

0%

5%

10%

6/25/2014 9/25/2014 12/25/2014 3/25/2015 6/25/2015

Imprivata Return Relative To S&P 500

Imprivata S&P 500

Connecture

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Date of first funding: 2005

IPO Date/Price: December 12, 2014/$8.00

Price (7/7/2015): $11.60

VCs: Chrysalis Ventures, SSM Partners, LiveOak Partners, Great Point Partners

Brief Description: Provides process automation to the payer market

-10%

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70%

12/12/2014 2/12/2015 4/12/2015 6/12/2015

Connecture Return Relative To S&P 500

Connecture S&P 500

Invitae

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Date of first funding: 2011

IPO Date/Price: February 12, 2015/$16.00

Price (7/7/2015): $14.92

VCs: Randy Scott, Redmile Group, Genesys Capital, Casdin Capital, JP Morgan, Thomas, McNerney & Partners

Brief Description: Genomic testing

-35%

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2/1/2015 3/1/2015 4/1/2015 5/1/2015 6/1/2015 7/1/2015

Invitae Return Relative To S&P 500

Invitae S&P 500

EvolentHealth

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Date of first funding: 2011

IPO Date/Price: June 5, 2015/$17.00

Price (7/7/2015): $19.24

VCs: TPG Growth, UPMC, The Advisory Board

Brief Description: Population health managed services solution

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6/5/2015 6/15/2015 6/25/2015 7/5/2015

Evolent Return Relative To S&P 500

Evolent S&P 500

Fitbit

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Date of first funding: 2008

IPO Date/Price: June 18, 2015/$20.00

Price (7/7/2015): $42.15

VCs: True Ventures, SoftTechVC, Felicis Ventures, Foundry Group, SoftBank Capital, Sapphire Ventures, Qualcomm

Brief Description: Wearable device to measure health and physical activity

-20%

0%

20%

40%

60%

80%

100%

120%

6/18/2015 6/26/2015 7/4/2015

Fitbit Return Relative To S&P 500

Fitbit S&P 500

Mindbody

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Date of first funding: 2005

IPO Date/Price: June 19, 2015/$14.00

Price (7/7/2015): $12.26

VCs: Wavemaker (Siemer) Partners, Bessemer Ventures, Catalyst Investors, IVP, W Capital Partners, Montreux Equity Partners

Brief Description: Management software for health clubs

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6/19/2015 6/28/2015 7/7/2015

Mindbody Return Relative To S&P 500

Mindbody S&P 500

Teladoc

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Date of first funding: 2009

IPO Date/Price: July 1, 2015/$19.00

Price (7/7/2015): $27.01

VCs: HLM Venture Partners, Cardinal Partners, Trident Capital, Kleiner Perkins, New Capital Partners, QuestMark Partners, Icon Ventures, Greenspring Associates, FLAG Capital, Jafco Ventures

Brief Description: Virtual doctor visits

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30%

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60%

7/1/2015 7/2/2015 7/3/2015 7/4/2015 7/5/2015 7/6/2015 7/7/2015

Teladoc Return Relative To S&P 500

Teladoc S&P 500

ContactRick Beberman

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Slides Developed By Rick Beberman