When Inovalon, the first digital health IPO of 2015, was planning its initial stock offering, it hoped to raise $500 million. But it garnered about $100 million more when its shares began trading this week, a sign of continued investor bullishness for the health tech sector.
Another sign of investor expectations—the company after one day of public trading sports a price-to-earnings ratio of 68.49, higher than more established health IT companies such as Cerner (56.94) and McKesson (30.27).
The Bowie, Md.-based company priced its shares at $27 for initial trading Thursday and shares hovered around $29.61 before closing at the offering price of $27. Shares rose to $27.67 in midday trading Friday.
With roughly 22 million shares being offered, the IPO translates to nearly $600 million in fresh funds for the data analytics company.
The firm offers a large registry, called MORE2, which its prospectus said contained nearly 119 million unique patients' data. The firm uses that information to run population simulations testing the effects of various client policies on clinical outcomes. Walgreen Co. and several Blue Cross and Blue Shield plans are among its biggest clients, its prospectus stated.
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