topperforming

The Best-Performing Public Digital Health Companies

Graph1Yesterday I read an article on Huffington Post on digital health solutions and moving from hype to impact. During my morning routine, this led me to ask, “Which public digital health companies are winning and what can we learn from 2016 about the shape of the market moving forward?” In the graph above, we get a clear view of 28 companies listed in the Digital Health Index. The highest performer is none other than Athenahealth which is a cloud-based electronic health record (EHR) provider that IPO’d in 2007 and currently sits as the most valuable public Digital Health company.

The second runner up would be Cerner, a Health Information Technology company, which was dethroned when IMS Health and Quintiles merged. The stock is now called Q and is priced at $75.54. The company worth the least on the list is Streamline Health Solutions priced at $1.42. Streamline sells a revenue cycle optimization software.

Which Companies Performed The Best in 2016?

Graph2

The companies that grew the most in stock price in 2016 were iRhythm, Vocera Communications, and Mindbody. iRhythm which sells a wearable heart monitor and software to analyze the data closed in its first year at $30. Vocera, a healthcare communication company, ended at $18.49 with its stock price reaching at its highest of $20.00. iRhythm grew by 76% and Vocera by 55%. Coming in 3rd for 2016 was Mindbody who sells a cloud-based business management software to the Wellness industry. Its stock grew by 49%, closing at $21.30.

According to Rock Health’s official report, the most acquisitions were from companies who sold to hospitals. Because IMS Health and Quintiles completed their merger in October, I didn’t focus on them in this analysis. If we were to measure them, their merger resulted in a stock increase of 309%.

Who IPO’d in 2016 and where do they stand on the list?

Graph3

The 3 digital Health companies that IPO’d in 2016 and were recorded by Rock Health were iRhythm (IRTC), Tabula Rasa Health (TRHC), and Nant Health (NH). If we examine the blue bars we can see that out of the 3 companies Nant Health was the only one to close out the year with a lower stock price than its opening.

iRhythm grew the most and closed at the highest stock price out of the 3. What this tells us is FDA approved hardware combined with software is a winning combination. It also indicates that software, especially communication or enterprise-focused services, won most of the last year.

What type of business are the companies in and how much was their IPO?

  • iRhtyhm — $109M IPO on October 20th — Wearable Biosensors
  • Tarasa — $115M IPO on September 29th — Precision Medicine
  • Nant Health — $91M IPO on Jun 2nd —- BioTech solution for cancer

Which Digital Health companies performed the worst in 2016?

Graph4

If we look at the underperformers of 2016, the ones who dropped in value were Connecture, Computer Programmer System, and Fitbit. Fitbit decreased the most by 75% in stock price dropping from $29.76 to $7.32. Which draws the question, do wearables drive patient engagement? Aside from Fitbit, it appears online health insurance company Connecture didn’t fare well either as it dropped by 51% in stock price sitting at $1.88.

Electronic Medical Record provider Computer Program and System (CPSI) also dropped in value as it started the year at $49.36, ended at $23.60 and is now at $22.75. While Athenahealth was praised as the most valuable company, it didn’t fare so well last year in value. It dropped by 34% over the course of the year. Athena is now at $123.85 but started 2016 at $158.23.

Takeaways

The reason EHR companies like Cerner and AthenaHealth are performing well is because government incentives doctors and hospitals to adopt its technology. While iRhythm sat on the top of the list in stock growth, it’s important to note that FDA approval and aligning your business strategy with the policy can lead to a big payoff. Healthcare communication and performance tools seem to have fared well.

Fitbit had a great fall in value during 2016, and despite its acquisition of Pebble, I’m a little pessimistic about the company’s ability to change things in 2017. The way I see it the most valuable and best-performing companies has designed solutions that take advantage of federal policies. Moving forward we can anticipate more opportunities and businesses popping up especially with the repeal of the Affordable Care Act. It will be interesting to see which public companies thrive or die as a result.

captain

GregSubscribe


*Special Thanks to WordGirl (Editor)
*Sources: Rock Health, Google Finance, HuffingtonPost, NPR

0