Having survived the crash that followed the initial rush to the Internet, the firm named after former U.S. Surgeon General C. Everett Koop has succumbed to the disease that put many other dot-coms in the grave: no cash.
Drkoop.com, the Santa Monica, Calif.-based company whose stock once soared to $45 per share on the Nasdaq exchange and as of last week traded over the counter at 0.0014 cents per share, announced it will liquidate under a Chapter 7 bankruptcy filing.
"The company's efforts to obtain additional financing and sell certain of its assets have not been successful," said drkoop.com in a written statement last week. In its bankruptcy announcement, drkoop.com-which raised $84.4 million in its 1999 initial public offering-said shareholders aren't likely to receive any proceeds from the liquidation.
A recorded message on the company's phone system said it filed in U.S. Bankruptcy Court in the Southern District of California. Officials did not return repeated telephone calls and written requests for additional information.
Drkoop.com is hardly the only healthcare-services company to have struggled to make a living on the Web. Healthcare information and e-transaction provider WebMD, Atlanta, lost $6.5 billion on revenue of $530.2 million in the first nine months of this year.
"There has not yet been an established economic model for medical information," said Richard Helppie, chief executive officer of Superior Consultant Holdings Corp., a Southfield, Mich.-based healthcare consulting firm that invested $6 million in drkoop.com when it went public in 1999.
Superior invested when the company's vision was to create a personal medical record that would be available online to caregivers across the country. Drkoop.com's "entire business model shifted to medical information around an advertising model, and that has never worked," Helppie said. Superior pulled out before losing money, he said.
In the first nine months of 2001, drkoop.com, doing business as Dr. Koop Life Care Corp., lost nearly three times what it took in. From January 1999 until September 2001, the company lost a total of $193.6 million on revenue of roughly $41 million, according to Securities and Exchange Commission filings. As of Sept. 30, the company reported assets of $14.3 million and liabilities of $41.2 million.
Founded in 1998 on the vision of using the Web to bring reliable healthcare information to the public, drkoop.com hit the public markets at a time when Wall Street was funding Web-based start-ups. But struggling against mounting losses, the company diversified this past April by acquiring a home-infusion therapy firm. At the time, officials said they expected the $7 million acquisition of IVonyx, Livonia, Mich., to bring in at least $30 million in annual revenue. IVonyx revenue was less than expected and start-up expenses were more.