Latest news with #AaronDeGagne
Miami Herald
30-06-2025
- Business
- Miami Herald
Hims & Hers' ugly split with Wegovy maker weighs on the telehealth company's future
LOS ANGELES - Hims & Hers, the high-flying telehealth company that rapidly ascended from a buzzy startup selling Viagra to a multibillion-dollar business with a Super Bowl ad, had a hard week. The San Francisco company's shares took a dive June 23 after its partnership with Novo Nordisk crumbled. The Danish drugmaker abruptly ended its agreement to let Hims & Hers directly sell its popular weight-loss drug, prompting the companies to spar publicly. Less than two months after agreeing to partner with Hims & Hers, Novo Nordisk accused the telehealth company of putting patient safety at risk through "deceptive" marketing and selling a knockoff version of its drug Wegovy. Hims & Hers fired back, alleging that Novo Nordisk was "misleading the public" and wanted to "control clinical standards and steer patients to Wegovy." The messy split is the latest hurdle facing Hims & Hers, a platform where people subscribe to get help for hair loss, improve sex, lose weight and address other health problems. The company aims to reach $6.5 billion in revenue by 2030. The tussle also highlights the tensions between telehealth platforms and pharmaceutical companies. "The termination of this partnership suggests that Novo still views Hims' marketing and sales tactics as a threat to branded Wegovy and indicates Novo considers Hims more of a competitor than a true partner," Aaron DeGagne, a senior analyst of healthcare at PitchBook, said in a statement. Hims & Hers' stock price has swung wildly this year. The price had at one point soared more than 150% this year before the Novo split knocked off a nearly a third of its valuation early last week. Its share price rose nearly 7% on Friday to end the week at $49.41. Monday's trading saw the shares slide in the morning before closing slightly up at $49.85. Hims & Hers is disrupting the healthcare industry, testing the limits of regulations to make it easier to buy popular drugs at lower prices. Its showdown with Novo could help define how far it can go. While Hims & Hers faces more legal risks after the breakup, some analysts said they don't expect the fallout to heavily harm the company's growth. The company is expanding beyond just treating weight loss. Still, Hims & Hers is losing a potential source of revenue. "Even with all these revenue streams, the bigger concern (rightfully so) is the ability for these revenue streams to fill the expected hole that the end of the NovoCare partnership creates," Michael Cherny, a senior research analyst at Leerink Partners, said in a note. NovoCare is the pharmacy people were able to access on the Hims & Hers platform to buy the weight-loss drug. Last year, Hims & Hers said in a letter to shareholders that the company expects its weight loss offerings will contribute at least $725 million of revenue in 2025 but that treatments outside of that category will make up the majority of its sales. Wegovy is just one weight-loss drug it offers. Drug disruptor Launched in 2017, Hims initially focused on treating men's health issues such as hair loss and erectile dysfunction - concerns that people might feel too embarrassed to bring up in doctor visits. Instead, subscribers answer questions online, correspond with medical professionals virtually and get the prescribed drugs in visually pleasing packages delivered discreetly to their homes. Andrew Dudum, one of the company's co-founders and its chief executive, started Hims at venture studio Atomic in San Francisco. The startup, now known as Hims & Hers Health Inc., then expanded into women's health, went public in 2021 and grew its workforce to more than 1,600 workers. Hims & Hers' annual revenue grew from $148.8 million in 2020 to $1.48 billion in 2024. The company also became profitable with its net income reaching $126 million in 2024, compared with a loss of $18 million in 2020. The company forecasts it will reach between $2.3 billion and $2.4 billion in revenue this year. The company's growth and 2.4 million-subscriber base was turbocharged as people looked for easier access and affordable options to the wildly popular weight-loss drugs Wegovy and Ozempic. Despite strong results in the first quarter of this year, the company's forecast for second-quarter revenue fell below analysts' expectations. In May, Hims & Hers said it was slashing more than 4% of its workforce after signaling it would move away from selling cheaper alternatives to weight-loss drugs. Its stock had initially surged in February after the company released a controversial Super Bowl ad promoting its treatment for weight loss. The ad marketed the telehealth platform as an affordable solution to a system that is "built to keep us sick and stuck." But the company's aggressive marketing triggered backlash. Doctors, politicians and drugmakers quickly criticized the company for not disclosing the risks associated with the compounded drugs that Hims & Hers sometimes uses for weight loss. With compounded drugs, licensed pharmacists alter, mix or combine ingredients of a drug to customize medicines. Though copying patented drugs is illegal, compounded knockoffs are allowed if they are tailored for a patient who might need something slightly different than what the patent-holding company produces. For example, a person might take a compounded drug if they're allergic to a certain dye. Taking compounded drugs comes with risks, according to the U.S. Food and Drug Administration. Unlike generics, they're not approved by the FDA, a federal agency that verifies whether drugs are safe and effective . Compounding drugs is also allowed when there's a shortage of an FDA-approved drug, which has happened with Wegovy and Ozempic. But those drugs are no longer in shortage, and the FDA has warned the public about taking compounded drugs when it isn't medically necessary. Drug war erupts The fallout between Hims & Hers and Novo Nordisk centers on its sales of compounded versions of Wegovy, a drug people inject to decrease hunger so they eat less and lose weight. In April, the two companies teamed up to make obesity treatment more affordable and accessible. Starting at $599 per month, some people were able to get prescribed to Wegovy and a Hims & Hers membership. That was much cheaper than the previous cost of paying $1,999 per month for Wegovy on the Hims & Hers platform. That partnership was short-lived. Novo Nordisk said this week that it's cutting off Hims & Hers' direct access to Wegovy. "Hims & Hers Health, Inc. has failed to adhere to the law which prohibits mass sales of compounded drugs under the false guise of 'personalization' and are disseminating deceptive marketing that put patient safety at risk," Novo Nordisk said in a statement. Hims & Hers advertises a compounded drug that contains the same ingredients in Wegovy for $165 per month. Novo Nordisk, citing its own investigation and a Brookings Institution report, said ingredients in knock-off drugs sold by telehealth entities and compounding pharmacies are manufactured in China and do not have FDA approval. Novo Nordisk sells Wegovy through its pharmacy NovoCare and telehealth platforms LifeMD and Ro. On Thursday, the company also announced a partnership with WeightWatchers to sell Wegovy at a discounted price in July. Dudum, Hims & Hers chief executive, said on social media site X that the telehealth provider would still provide a variety of treatments including Wegovy. The company says on its website that it works with pharmacies in Arizona and Ohio that are regulated. "We refuse to be strong-armed by any pharmaceutical company's anticompetitive demands that infringe on the independent decision making of providers and limit patient choice," he said in the statement. Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
Yahoo
28-06-2025
- Business
- Yahoo
Hims & Hers' ugly split with Wegovy maker weighs on the telehealth company's future
Hims & Hers, the high-flying telehealth company that rapidly ascended from a buzzy startup selling Viagra to a multibillion-dollar business with a Super Bowl ad, had a hard week. The San Francisco company's shares took a dive Monday after its partnership with Novo Nordisk crumbled. The Danish drugmaker abruptly ended its agreement to let Hims & Hers directly sell its popular weight-loss drug, prompting the companies to spar publicly. Less than two months after agreeing to partner with Hims & Hers, Novo Nordisk accused the telehealth company of putting patient safety at risk through 'deceptive' marketing and selling a knockoff version of its drug Wegovy. Hims & Hers fired back, alleging that Novo Nordisk was "misleading the public" and wanted to 'control clinical standards and steer patients to Wegovy.' The messy split is the latest hurdle facing Hims & Hers, a platform where people subscribe to get help for hair loss, improve sex, lose weight and address other health problems. The company aims to reach $6.5 billion in revenue by 2030. The tussle also highlights the tensions between telehealth platforms and pharmaceutical companies. 'The termination of this partnership suggests that Novo still views Hims' marketing and sales tactics as a threat to branded Wegovy and indicates Novo considers Hims more of a competitor than a true partner,' Aaron DeGagne, a senior analyst of healthcare at PitchBook, said in a statement. Hims & Hers' stock price has swung wildly this year. The price had at one point soared more than 150% this year before the Novo split knocked off a nearly a third of its valuation on Monday. Its share price rose nearly 7% on Friday to end the week at $49.41. Hims & Hers is disrupting the healthcare industry, testing the limits of regulations to make it easier to buy popular drugs at lower prices. Its showdown with Novo could help define how far it can go. While Hims & Hers faces more legal risks after the breakup, some analysts said they don't expect the fallout to heavily harm the company's growth. The company is expanding beyond just treating weight loss. Still, Hims & Hers is losing a potential source of revenue. 'Even with all these revenue streams, the bigger concern (rightfully so) is the ability for these revenue streams to fill the expected hole that the end of the NovoCare partnership creates,' Michael Cherny, a senior research analyst at Leerink Partners, said in a note. NovoCare is the pharmacy people were able to access on the Hims & Hers platform to buy the weight-loss drug. Last year, Hims & Hers said in a letter to shareholders that the company expects its weight loss offerings will contribute at least $725 million of revenue in 2025 but that treatments outside of that category will make up the majority of its sales. Wegovy is just one weight-loss drug it offers. Launched in 2017, Hims initially focused on treating men's health issues such as hair loss and erectile dysfunction — concerns that people might feel too embarrassed to bring up in doctor visits. Instead, subscribers answer questions online, correspond with medical professionals virtually and get the prescribed drugs in visually pleasing packages delivered discreetly to their homes. Andrew Dudum, one of the company's co-founders and its chief executive, started Hims at venture studio Atomic in San Francisco. The startup, now known as Hims & Hers Health Inc., then expanded into women's health, went public in 2021 and grew its workforce to more than 1,600 workers. Hims & Hers' annual revenue grew from $148.8 million in 2020 to $1.48 billion in 2024. The company also became profitable with its net income reaching $126 million in 2024, compared with a loss of $18 million in 2020. The company forecasts it will reach between $2.3 billion and $2.4 billion in revenue this year. The company's growth and 2.4 million-subscriber base was turbocharged as people looked for easier access and affordable options to the wildly popular weight-loss drugs Wegovy and Ozempic. Read more: Young start-up Hims sells generic Viagra and Rogaine to the Instagram crowd Despite strong results in the first quarter of this year, the company's forecast for second-quarter revenue fell below analysts' expectations. In May, Hims & Hers said it was slashing more than 4% of its workforce after signaling it would move away from selling cheaper alternatives to weight-loss drugs. Its stock had initially surged in February after the company released a controversial Super Bowl ad promoting its treatment for weight loss. The ad marketed the telehealth platform as an affordable solution to a system that is 'built to keep us sick and stuck.' But the company's aggressive marketing triggered backlash. Doctors, politicians and drugmakers quickly criticized the company for not disclosing the risks associated with the compounded drugs that Hims & Hers sometimes uses for weight loss. With compounded drugs, licensed pharmacists alter, mix or combine ingredients of a drug to customize medicines. Though copying patented drugs is illegal, compounded knockoffs are allowed if they are tailored for a patient who might need something slightly different than what the patent-holding company produces. For example, a person might take a compounded drug if they're allergic to a certain dye. Taking compounded drugs comes with risks, according to the U.S. Food and Drug Administration. Unlike generics, they're not approved by the FDA, a federal agency that verifies whether drugs are safe and effective . Compounding drugs is also allowed when there's a shortage of an FDA-approved drug, which has happened with Wegovy and Ozempic. But those drugs are no longer in shortage, and the FDA has warned the public about taking compounded drugs when it isn't medically necessary. Read more: Cheaper alternatives to Ozempic are flooding the weight-loss market. Are they safe? The fallout between Hims & Hers and Novo Nordisk centers on its sales of compounded versions of Wegovy, a drug people inject to decrease hunger so they eat less and lose weight. In April, the two companies teamed up to make obesity treatment more affordable and accessible. Starting at $599 per month, some people were able to get prescribed to Wegovy and a Hims & Hers membership. That was much cheaper than the previous cost of paying $1,999 per month for Wegovy on the Hims & Hers platform. That partnership was short-lived. Novo Nordisk said this week that it's cutting off Hims & Hers' direct access to Wegovy. 'Hims & Hers Health, Inc. has failed to adhere to the law which prohibits mass sales of compounded drugs under the false guise of 'personalization' and are disseminating deceptive marketing that put patient safety at risk,' Novo Nordisk said in a statement. Hims & Hers advertises a compounded drug that contains the same ingredients in Wegovy for $165 per month. Novo Nordisk, citing its own investigation and a Brookings Institution report, said ingredients in knock-off drugs sold by telehealth entities and compounding pharmacies are manufactured in China and do not have FDA approval. Novo Nordisk sells Wegovy through its pharmacy NovoCare and telehealth platforms LifeMD and Ro. On Thursday, the company also announced a partnership with WeightWatchers to sell Wegovy at a discounted price in July. Dudum, Hims & Hers chief executive, said on social media site X that the telehealth provider would still provide a variety of treatments including Wegovy. The company says on its website that it works with pharmacies in Arizona and Ohio that are regulated. 'We refuse to be strong-armed by any pharmaceutical company's anticompetitive demands that infringe on the independent decision making of providers and limit patient choice,' he said in the statement. Sign up for our Wide Shot newsletter to get the latest entertainment business news, analysis and insights. This story originally appeared in Los Angeles Times. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Los Angeles Times
28-06-2025
- Business
- Los Angeles Times
Hims & Hers' ugly split with Wegovy maker weighs on the telehealth company's future
Hims & Hers, the high-flying telehealth company that rapidly ascended from a buzzy startup selling Viagra to a multibillion-dollar business with a Super Bowl ad, had a hard week. The San Francisco company's shares took a dive Monday after its partnership with Novo Nordisk crumbled. The Danish drugmaker abruptly ended its agreement to let Hims & Hers directly sell its popular weight-loss drug, prompting the companies to spar publicly. Less than two months after agreeing to partner with Hims & Hers, Novo Nordisk accused the telehealth company of putting patient safety at risk through 'deceptive' marketing and selling a knockoff version of its drug Wegovy. Hims & Hers fired back, alleging that Novo Nordisk was 'misleading the public' and wanted to 'control clinical standards and steer patients to Wegovy.' The messy split is the latest hurdle facing Hims & Hers, a platform where people subscribe to get help for hair loss, improve sex, lose weight and address other health problems. The company aims to reach $6.5 billion in revenue by 2030. The tussle also highlights the tensions between telehealth platforms and pharmaceutical companies. 'The termination of this partnership suggests that Novo still views Hims' marketing and sales tactics as a threat to branded Wegovy and indicates Novo considers Hims more of a competitor than a true partner,' Aaron DeGagne, a senior analyst of healthcare at PitchBook, said in a statement. Hims & Hers' stock price has swung wildly this year. The price had at one point soared more than 150% this year before the Novo split knocked off a nearly a third of its valuation on Monday. Its share price rose nearly 7% on Friday to end the week at $49.41. Hims & Hers is disrupting the healthcare industry, testing the limits of regulations to make it easier to buy popular drugs at lower prices. Its showdown with Novo could help define how far it can go. While Hims & Hers faces more legal risks after the breakup, some analysts said they don't expect the fallout to heavily harm the company's growth. The company is expanding beyond just treating weight loss. Still, Hims & Hers is losing a potential source of revenue. 'Even with all these revenue streams, the bigger concern (rightfully so) is the ability for these revenue streams to fill the expected hole that the end of the NovoCare partnership creates,' Michael Cherny, a senior research analyst at Leerink Partners, said in a note. NovoCare is the pharmacy people were able to access on the Hims & Hers platform to buy the weight-loss drug. Last year, Hims & Hers said in a letter to shareholders that the company expects its weight loss offerings will contribute at least $725 million of revenue in 2025 but that treatments outside of that category will make up the majority of its sales. Wegovy is just one weight-loss drug it offers. Launched in 2017, Hims initially focused on treating men's health issues such as hair loss and erectile dysfunction — concerns that people might feel too embarrassed to bring up in doctor visits. Instead, subscribers answer questions online, correspond with medical professionals virtually and get the prescribed drugs in visually pleasing packages delivered discreetly to their homes. Andrew Dudum, one of the company's co-founders and its chief executive, started Hims at venture studio Atomic in San Francisco. The startup, now known as Hims & Hers Health Inc., then expanded into women's health, went public in 2021 and grew its workforce to more than 1,600 workers. Hims & Hers' annual revenue grew from $148.8 million in 2020 to $1.48 billion in 2024. The company also became profitable with its net income reaching $126 million in 2024, compared with a loss of $18 million in 2020. The company forecasts it will reach between $2.3 billion and $2.4 billion in revenue this year. The company's growth and 2.4 million-subscriber base was turbocharged as people looked for easier access and affordable options to the wildly popular weight-loss drugs Wegovy and Ozempic. Despite strong results in the first quarter of this year, the company's forecast for second-quarter revenue fell below analysts' expectations. In May, Hims & Hers said it was slashing more than 4% of its workforce after signaling it would move away from selling cheaper alternatives to weight-loss drugs. Its stock had initially surged in February after the company released a controversial Super Bowl ad promoting its treatment for weight loss. The ad marketed the telehealth platform as an affordable solution to a system that is 'built to keep us sick and stuck.' But the company's aggressive marketing triggered backlash. Doctors, politicians and drugmakers quickly criticized the company for not disclosing the risks associated with the compounded drugs that Hims & Hers sometimes uses for weight loss. With compounded drugs, licensed pharmacists alter, mix or combine ingredients of a drug to customize medicines. Though copying patented drugs is illegal, compounded knockoffs are allowed if they are tailored for a patient who might need something slightly different than what the patent-holding company produces. For example, a person might take a compounded drug if they're allergic to a certain dye. Taking compounded drugs comes with risks, according to the U.S. Food and Drug Administration. Unlike generics, they're not approved by the FDA, a federal agency that verifies whether drugs are safe and effective . Compounding drugs is also allowed when there's a shortage of an FDA-approved drug, which has happened with Wegovy and Ozempic. But those drugs are no longer in shortage, and the FDA has warned the public about taking compounded drugs when it isn't medically necessary. The fallout between Hims & Hers and Novo Nordisk centers on its sales of compounded versions of Wegovy, a drug people inject to decrease hunger so they eat less and lose weight. In April, the two companies teamed up to make obesity treatment more affordable and accessible. Starting at $599 per month, some people were able to get prescribed to Wegovy and a Hims & Hers membership. That was much cheaper than the previous cost of paying $1,999 per month for Wegovy on the Hims & Hers platform. That partnership was short-lived. Novo Nordisk said this week that it's cutting off Hims & Hers' direct access to Wegovy. 'Hims & Hers Health, Inc. has failed to adhere to the law which prohibits mass sales of compounded drugs under the false guise of 'personalization' and are disseminating deceptive marketing that put patient safety at risk,' Novo Nordisk said in a statement. Hims & Hers advertises a compounded drug that contains the same ingredients in Wegovy for $165 per month. Novo Nordisk, citing its own investigation and a Brookings Institution report, said ingredients in knock-off drugs sold by telehealth entities and compounding pharmacies are manufactured in China and do not have FDA approval. Novo Nordisk sells Wegovy through its pharmacy NovoCare and telehealth platforms LifeMD and Ro. On Thursday, the company also announced a partnership with WeightWatchers to sell Wegovy at a discounted price in July. Dudum, Hims & Hers chief executive, said on social media site X that the telehealth provider would still provide a variety of treatments including Wegovy. The company says on its website that it works with pharmacies in Arizona and Ohio that are regulated. 'We refuse to be strong-armed by any pharmaceutical company's anticompetitive demands that infringe on the independent decision making of providers and limit patient choice,' he said in the statement.
Yahoo
30-05-2025
- Business
- Yahoo
The medtech IPO window is finally open. Or is it?
This story was originally published on MedTech Dive. To receive daily news and insights, subscribe to our free daily MedTech Dive newsletter. Editor's note: This is the first story in a two-part series on the medtech IPO landscape. The second story, a Q&A with Beta Bionics executives, will be published next week When Ceribell went public in October, the window for medtech initial public offerings was open just a crack — if not shut completely. Ceribell, which develops technology to diagnose patients with neurological disorders, led a rush of public offerings activity in just a few months, breaking a three-year drought in IPOs. The new public offerings prompted questions about whether the medical device industry could have another IPO moment after a 2021 spike. 'At that time, we debated potentially being the first med device IPO in a few years,' Ceribell CFO Scott Blumberg said in an emailed statement. 'Initially we, and I think a number of peers, saw greater appeal in letting another company take the risk of being first. In recent history, the fast followers had received premium valuations for being the first company to go public in a window.' Aaron DeGagne, a senior healthcare analyst with PitchBook, said the medtech industry's IPO decline followed the later stages of the COVID-19 pandemic, which had zero interest rates and more favorable market dynamics, and was pre-inflation. There were 51 IPOs in 2021, up from 24 the prior year, according to data from PitchBook, which includes private equity and venture capital offerings. 'But since then, it's been pretty tough,' DeGagne said. He highlighted Tempus AI as one of the few companies to go public during those years. The number of IPOs each year from 2020 to Q1 2025 This embedded content is not available in your region. There has been a small burst of IPOs in the few months since Ceribell went public late last year, when the company raised more than $207 million. Anteris Technologies, a heart valve developer, raised nearly $89 million when the company went public in December. Diabetes tech firm Beta Bionics followed in January, raising about $212 million, and Kestra Medical also raised $202 million when it went public in March. The latest activity could be a signal that the IPO drought ends this year, as more companies may be ready to test the market. 'Because the gap in IPO activity was so prolonged — just over three years — the quality of most mature medical device companies is extremely high,' Blumberg said. 'There are multiple medical device companies with profiles that should make them excellent IPO candidates, potentially even in a turbulent market.' John Babitt, a partner with EY, said that 'if the window is open in the second half of '25 … we'll see a decent amount of medtech IPOs.' While companies carefully select the right moment for an IPO, the recent public offerings could also inspire others to follow. Furthermore, Babitt said there was a long list of $100 million funding rounds in the first quarter of 2025 — a level he has not seen in his more than 25 years covering the industry — which is another indicator that companies may be ready. However, a volatile economy, beginning shortly after President Donald Trump took office in late January, complicates the moment. While tensions recently eased with a U.S.-China deal to reduce tariffs for 90 days, the uncertain economic environment could influence companies' decisions. Blumberg, who answered MedTech Dive's questions in April during the economic drop, said some companies may decide to wait. 'Depending on how things play out, some of these companies may elect to wait for calmer markets,' Blumberg said. 'I have no doubt that they will have ample funding opportunities and it is only a matter of time before we see a new class of very high-quality public medical device companies.' Companies typically go public as a way to pay out private investors and raise money after demonstrating solid fundamental financials. It's not a simple decision to make, however — going public is a long and challenging process that can take the better part of a year, require dozens of meetings with banks and potential investors, and should only happen when a company has the correct financials and leadership team in place. Ceribell first decided to pursue an IPO in 2024 — about nine months before the actual IPO date — after preparing for about three years. Babitt said one of the key factors for companies is to have reliable visibility into their revenue streams, and they must demonstrate that visibility to institutional investors, along with about a $50 million run rate. Companies that do not have good revenue visibility tend to struggle once public, he added, which was the case for some companies in the 2021 IPO spike. Companies that had $30 million or $40 million in sales but didn't have visibility and were unable to grow revenue by double digits in a quarter were 'punished, quite frankly,' said Babitt, who did not name specific firms. One of the biggest challenges after going public, along with forecasting and delivering on growth every quarter, is being vulnerable to market dynamics that are largely out of your hands. 'There's a lack of control that's frustrating,' Beta Bionics CEO Sean Saint said. 'The market moves, and all of a sudden, our stock moves for zero reason associated with anything with Beta Bionics.' Saint explained that macroeconomic factors move the stock for a number of reasons, including Beta Bionics being a smaller stock, a new entrant to public markets and investors not yet building up complete positions. 'For those reasons, we've become more volatile than the market as a whole,' he added. 'We understand why that is, but it doesn't change the fact that we have zero control over it.' Companies that recently held public offerings — and chose their go-public dates months ahead of time — quickly learned that lesson. Stock prices for the new companies have mostly struggled for much of the year as macroeconomic conditions have whiplashed the U.S. economy under the Trump administration, largely due to its tariff strategy. Ceribell, Beta Bionics and Anteris all saw their stock prices decline in late March and April when tariff tensions were high. The lack of control, Babitt said, is why 'you want high-quality candidates from whatever sector to be out there, so that their story truly hasn't changed; their revenue profile truly hasn't changed.' Closing stock prices for Kestra Medical, Ceribell, Beta Bionics and Anteris Technologies from Oct. 10, 2024, to May 27. This embedded content is not available in your region. Babitt said companies that work with EY have not decided to cancel their planned IPOs because of recent volatility. The question of whether the medical device industry's IPO window is open has a complicated answer. The four public offerings in as many months could be a sign that more companies are ready — the IPOs themselves could also inspire activity. Or companies could delay to let the economy settle for a little while longer. The lengthy timeline of a public offering could also mean that companies that planned in January, or sometime in the first quarter, to go public will not actually begin selling shares until 2026, regardless of economic conditions. PitchBook's DeGagne said 2025 will likely not be the IPO moment others believe it could be. Medline Industries is rumored to be looking to go public in the near future, a company DeGagne is watching, along with Heart Flow, which develops artificial intelligence for coronary artery disease. Medtronic also announced that it plans to spin off its diabetes business and take the company public through an IPO within the next 18 months. 'We could see some additional listings here and there. But I think a lot of companies are still comfortable kind of waiting on the sidelines for now,' DeGagne said. Babitt sees it differently. EY has already worked with several companies that plan to go public. Kestra and Beta Bionics also upsized their expectations at the last minute. For example, Beta Bionics originally planned to raise about $114 million but ultimately raised more than $200 million. 'Everybody took notice of that,' Babitt said. An IPO window does need a stable market to remain open, otherwise good candidates will wait or could even pursue other avenues like M&A. As tariff tensions ease with China, and the stock market rebounds, that moment could be here. 'I'm optimistic with the second half,' said Babitt. Recommended Reading Beta Bionics raises $204M in IPO Sign in to access your portfolio
Yahoo
23-05-2025
- Business
- Yahoo
Hinge Health goes public in positive signal for digital health IPOs
This story was originally published on Healthcare Dive. To receive daily news and insights, subscribe to our free daily Healthcare Dive newsletter. Hinge Health hit the public markets on Thursday, raising $437.3 million alongside its selling shareholders in an IPO that could serve as a key indicator for other digital health firms looking to go public. The digital musculoskeletal care company opened on the New York Stock Exchange at $39.25 per share Thursday, rising 23% above its public offering price of $32 per share. Few digital health companies have gone public in recent years, but a successful IPO could be significant for the industry, experts say. 'As long as [the share price] stays flat, I think it's a win for the sector,' Aaron DeGagne, senior analyst for healthcare at PitchBook, told Healthcare Dive. 'I think at this point any listing is a win.' Founded in 2014, Hinge offers digital musculoskeletal care and physical therapy, including through an artificial intelligence-backed movement sensor and a wearable device that provides electrical nerve stimulation. The company, which has previously raised hundreds of millions in venture capital funding, filed to go public in March. Hinge's IPO price was at the top of the expected range it released earlier this month. One boost for Hinge was the company's recent move toward profitability, DeGagne said. The company reported a net income of $17.1 million in the three months ended March 31, compared with a loss of $26.5 million the prior-year period, according to a securities filing. 'I think public market investors got burned with pretty much all digital health companies that went public in the boom times of 2020, 2021,' DeGagne said. 'So profitability was a huge item to have here.' A number of firms publicly exited in 2021 amid record-breaking levels of venture capital investment in digital health. But IPOs soon slowed to a crawl, and many companies failed to perform on the public markets. However, more digital health companies could be poised to move toward an IPO, especially if other offerings are successful, experts say. Another digital health firm, chronic condition management company Omada Health, filed to go public earlier this month. Other companies that could be inching toward an IPO include Hinge competitor Sword Health, mental health firm Spring Health and women's and family health company Maven, according to DeGagne. Broader market conditions will also make an impact too. For example, companies like Klarna and StubHub delayed their IPOs last month after President Donald Trump's tariff plan caused turmoil on the markets. 'If shares start to climb significantly, I think that tilts things more towards potentially more listings,' DeGagne said. 'But I think that it's more related probably to overall market conditions than share price performance of one company.' Recommended Reading Virtual physical therapy company Hinge Health files for IPO Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
