Primary care company One Medical has hired banks ahead of an IPO, CNBC reports

Primary care organization One Medical has hired banks including JPMorgan and Morgan Stanley in preparation for an initial public offering, CNBC reports.

The company, which was valued at about $1.5 billion in a financing round last year, is expected to file its prospectus by the first quarter of 2020 and possibly sooner, CNBC reported, citing people familiar with the matter who asked not to be named because the plans are confidential.

A spokeswoman for One Medical declined to comment.

Backed by Google parent company Alphabet, San Francisco-based One Medical operates 72 primary care practices in nine major U.S. cities. The company aims to provide a more modern healthcare experience by offering 24/7 virtual care, same-day appointments, a mobile app for online appointment scheduling, access to digital healthcare records and digital health reminders.

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The company was founded in 2007 by physician Tom Lee, who led the company until 2017 when Amir Dan Rubin, a former UnitedHealth group executive, took the reins as president and CEO. Rubin recently told CNBC that the company has seen “tremendous growth” in other areas of its business, including partnerships with self-insured employers for on-site and nearby health clinics. 

IPO recaps

One Medical joins a growing list of healthcare technology companies to go public this year or with plans to go public soon including Livongo, Health Catalyst, Change Healthcare and Phreesia.

Chronic disease management company Livongo Health and data and analytics company Health Catalyst both had strong public debuts in July. Phreesia, which developed a patient intake management platform, closed its first day of trading as a public company July 19 about 40% above its set price.

But investors remain skeptical about recent IPOs. Phreesia opened up on the New York Stock Exchange at $26.75 after being originally priced at $18 per share. The stock climbed as much as 53% above its offering price. It's now slightly down at $25.48. Livongo has dropped 32% since trading in July, and Health Catalyst is up about 4% from its initial price.

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Progyny, a company that manages fertility benefits for employees at large firms, filed its preliminary prospectus with the Securities and Exchange Commission Sept. 27 for its IPO.

The company will trade under the symbol "PGNY" on the Nasdaq.

Progyny launched its fertility benefits solution in 2016 with its first five employer clients and has grown its client base to over 80. The company currently provides coverage to 1.4 million employees, the company said in its S-1 filing.

The company has raised nearly $100 million in venture capital with investors including Kleiner Perkins and M Ventures, Merck's corporate venture arm, according to Crunchbase.

Progyny counts Google and Microsoft among its largest clients; in the first half of 2019, Google accounted for 17% of Progyny's total revenue and Microsoft accounted for 11%. Facebook also is a large client, according to CNBC.

Progyny generated $103.4 million in revenue in the first half of 2019 and net income of $4.04 million. That compares to $48.4 million in revenue in the first six months of 2018 and a net loss of $2.4 million, the company said. Full-year 2017 revenue was $48.6 million, and that grew to $105.4 million in 2018, representing year-over-year growth of 117%. 

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The company said in its S-1 filing that its unique approach and range of benefits results in above-average fertility outcomes for its members, with in-network IVF pregnancy rates of 60.7% compared to 52.5% across all IVF fertility clinics.

The market for fertility treatments in the U.S. was approximately $6.7 billion in 2017, Progyny said in its S-1 filing. As only 50% of individuals suffering from infertility seek treatment, the company estimates the potential size of the U.S. fertility market to be at least twice as large.

"We believe we are well-positioned for growth as our current base of 1.4 million members represents only 2% of what we believe to be our total addressable market. In addition, we believe we can continue to increase our business with our existing clients as they expand their employee bases and adopt more of our services over time," the company said.