1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Barry Cohen
Barry Cohen
Articles (226) 

Profitable GoodRx Hopes to Raise $100 Million in IPO

Company that helps consumers save on prescriptions has made money over the past 4 years

September 02, 2020 | About:

How's this for an oddity? A pharmaceutical tech company going public is already profitable and has been for the past four years.

Santa Monica, California-based GoodRx filed its initial public offering last week, seeking to raise up to $100 million, according to paperwork submitted to the U.S. Securities and Exchange Commission. Shares of the nine-year-old company will be traded on the Nasdaq under the symbol GDRX.

The company's business? It runs a telemedicine platform and a free website and mobile app that track prescription drug prices in the U.S. and provides free coupons for discounts on medications. GoodRx checks more than 75,000 pharmacies in the United States, according to CNBC.

The company said in its filing it earned $55 million in profit in the first half of 2020, up 75% from the same period last year. Revenues for the first six months of 2020 were $257 million, up 48% from $173 million in the first half of 2019. In 2019, GoodRx earned $66 million on $388 million in revenue. According to an article in FierceHealthcare, the company was valued at $2.8 billion in August 2018 after the private equity firm Silver Lake Management LLC took a major stake.

GoodRx has enjoyed rapid growth, going from about 720,000 active users four years ago to nearly 5 million this past March. It estimates it has saved consumers $20 billion on drugs since its inception.

The company still appears to have just scratched the surface of its potential. It estimates its total addressable market to be approximately $800 billion, including a $524 billion prescription opportunity. The prospectus says that includes scrips that are written but not filled, a $30 billion pharmaceutical manufacturer solutions opening and a $250 billion telehealth market.

The business works like this: GoodRx gathers prices from numerous sources, including partnerships with pharmacy benefit managers. The PBMs provide discounted prices for insured customers. They also include in their negotiations a slightly less-discounted price for cash-paying patients who present with a GoodRx card or coupon.

This reporter can attest to the effectiveness of the GoodRx program, having used the company's card numerous times for savings of hundreds of dollars on drugs compared to what I would have paid with my prescription program through CVS Health Corp.'s (NYSE:CVS) Caremark.

GoodRx's sales come from collecting fees from PBMs that it works with whenever consumers present their GoodRx coupon at the pharmacy. About 17 million people use the service every month. As part of its plan to expand into other areas, last September the company launched a telehealth app called HeyDoctor, which is now in 50 states.

GoodRx was founded by Facebook Inc. (NASDAQ:FB) veteran Doug Hirsch and serial software entrepreneur Trevor Bezdek.

Disclosure: The author has no position in any of the companies mentioned in this article.

Read more here:

Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

About the author:

Barry Cohen
Barry Cohen has nearly 40 years experience in communications and marketing, the majority in senior positions at large international health care companies, including Abbott Laboratories and Bayer Inc.

He has contributed to a number of financial websites, writing primarily about the stocks of health care companies.

Rating: 0.0/5 (0 votes)


Please leave your comment:

Performances of the stocks mentioned by Barry Cohen

User Generated Screeners

pascal.van.garsseHigh FCF-M2
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)