Shares of Santa Monica-based healthcare company GoodRx soared 53% on the stock’s first day of trading Wednesday and by week’s end had a market capitalization of nearly $20 billion.
The company, whose app helps consumers save money on prescriptions and other healthcare services, raised a total of $1.3 billion in its initial public offering—$944 million from shares sold by the company and the remainder in shares held by pre-IPO investors.
GoodRx is an online platform that catalogs coupons, which consumers can use at pharmacies to lower the price of their prescriptions. GoodRx generates the vast majority of its revenue from the prescription coupons, which are available to use at more than 70,000 pharmacies across the country.
The company estimates that 18 million consumers could not have afforded to fill their prescriptions without the savings provided by GoodRx, according to its prospectus, which details the company’s plan to use the lion’s share of this week’s IPO proceeds to support the growth of the business.
GoodRx was founded in 2011, a year after co-founder Doug Hirsch went to a pharmacy to pick up some drugs and was given a bill for $450, Hirsch wrote in the SEC filing.
“I searched the internet and found that while I could compare prices for TVs or plane tickets, there was no guidance to help me to understand what healthcare should cost. I had stumbled into an inefficient, massive market that Americans, with or without insurance, had no ability to navigate,” the letter states. “I told my friend Trevor about my pharmacy experience, and we agreed that consumers, insured or not, desperately needed tools to sort through our confusing, frustrating, and expensive healthcare system. We also learned that physicians, medical professionals, and pharmacists across the country were likewise frustrated when patients couldn’t afford their prescribed treatments.”
There were multiple ways patients could save on their prescriptions, but virtually nobody knew about them, Hirsch added. That’s all changed within a decade as consumers are more empowered and better informed than ever before
“Millions of Americans — including many medical professionals — rely on GoodRx’s #1 ranked app to find affordable healthcare,” he said at the conclusion of the company introduction. “So far, we’ve saved Americans an estimated $20 billion on prescriptions and medical services… As much as we’ve accomplished in the past decade, we recognize that there is a tremendous amount of work — and opportunity — ahead of us.”