GoodRx files to go public, boasting track record of profitability

Joining a recent spate of digital health companies hitting the public market, GoodRx filed its initial public offering Friday.

The startup, which helps consumers find deals on their prescription medications, is looking to raise up to $100 million in an IPO, according to a filing with the U.S. Securities and Exchange Commission (SEC) Friday.

The Santa Monica, California-based company, launched in 2011, said its stock will traded on Nasdaq under the symbol GDRX, according to an S-1 filing.

The company didn't list specific share price or the number of shares it's selling in the filing.

The IPO is being led by Morgan Stanley, Goldman Sachs and J.P. Morgan. 

The past 12 months has been the year of the healthcare IPO with companies including Livongo, Phreesia, Health Catalyst, Change Healthcare, Progyny, One Medical, Accolade and GoHealth all testing the public market. It signaled the end of what many market analysts considered a three-year drought of new digital health public offerings. 

Telehealth company Amwell also recently filed an IPO.

RELATED: GoodRx acquires telemedicine company HeyDoctor to add virtual healthcare services

Unlike many other digital health companies that have gone public, GoodRx has been profitable since 2016, the earliest year included in its IPO prospectus.

Last year, GoodRx reported revenues of $388 million, up 55% from $250 million in 2018. The company pulled in $66 million in profits in 2019, up 50% from $43 million the previous year.  

The majority of the company's revenue, or 97%, comes from its prescription offering in which if collects fees from pharmacy benefit managers (PBMs) when consumers use a GoodRx code to fill a prescription. 

GoodRx has seen strong growth during the COVID-19 pandemic as its revenue grew 48% in the first half of 2020 to $257 million, up from $173 million in the first half of 2019. GoodRx also brought in $55 million in profit in the first half of 2020, up from $31 million in the first half of 2019.

The company's revenue has grown at a compound annual growth rate of 57% since 2016, GoodRx said in its S-1 filing.

"We believe our financial results reflect the significant market demand for our offerings and the value that we provide to the broader healthcare ecosystem," the company said.

The company reported 718,00 active monthly users in March 2016 and that balloned to 4.9 million March 2020.

RELATED: Amwell files to go public with $100M boost from Google

Good Rx had 4.4 million monthly active consumers and 15 million monthly visitors during the second quarter of 2020.

The company estimates that it has generated $20 billion of cumulative consumer savings through June 30, 2020.

According to GoodRx, approximately 18 million of our consumers could not have afforded to fill their prescriptions without the savings provided by the company's platform. Co-founders and co-CEOs Trevor Bezdek and Douglas Hirsch launched GoodRx to solve the challenges that consumers face in understanding, accessing, and affording healthcare, according to the company's IPO prospective.

The company started with a price comparison tool for prescriptions, offering consumers free access to lower prices on their medication. With the acquisition of telemedicine company HeyDoctor in September 2019, GoodRx expanded its services to include virtually care.

The company was valued at $2.8 billion in August 2018 after the private equity firm Silver Lake Management LLC took a major stake.

With the HeyDoctor deal, GoodRx now competes with other startups that combine virtual care and pharmacy services such as Hims, Hers, Ro and Nurx. While those companies offer drug delivery, GoodRx doesn’t sell medications; it instead directs consumers to the drugstore with the best prices and offers coupons.

The company estimates its total addressable market to be approximately $800 billion, including a $524 billion prescription opportunity, inclusive of prescriptions that are written but not filled, a $30 billion pharmaceutical manufacturer solutions opportunity and a $250 billion telehealth opportunity, according to the prospectus.

RELATED: GoHealth nabs blockbuster IPO raising $914M

GoodRx reports that it is the largest platform that aggregates pricing for prescriptions. The company collects and normalizes over 150 billion prescription pricing data points each day from sources spanning the healthcare industry, the company said in its SEC filing.

As part of its growth strategy, GoodRx is looking to offer more subscription services and expanded pharmaceutical manufacturer solutions. The company also plans to invest in more telehealth offerings.

However, the company faces a number of business challenges and expects its growth rate to slow, according to the prospectus. 

GoodRx relies significantly on its prescription offering and may not be successful in expanding its offerings within our markets, particularly the U.S. prescriptions market, or to other segments of the healthcare industry, the company said.