GoodRx shares jump 40pc in Nasdaq debut after over $1bn IPO

Shares of private equity-backed GoodRx Holdings Inc surged 40% in their debut on the Nasdaq on Wednesday after the online prescription drug platform raised $1.14 billion in its initial public offering.

The stock opened at $46, compared to the IPO price of $33 per share. At its opening price, the company is valued at nearly $18 billion, more than six times the valuation it commanded during its last private fundraise in 2018.

GoodRx's shares hit a session high of $49.57, a jump of over 50%.

The company, which counts PE firm Silver Lake among its biggest backers, sold about 34.6 million shares. It had initially set a target range between $24 and $28 per share.

GoodRx's debut comes on the heels of the successful IPOs of data warehouse company Snowflake Inc and Unity Software Inc, underscoring investor appetite for new stocks which promise rapid revenue growth.

Moreover, shelter-in-place restrictions to control the pandemic have prompted people to turn to virtual consultations and online purchases of medicines, benefiting companies like GoodRx, which is also one of the few startups to be profitable at the time of its IPO.

"Healthcare companies have been the most active segment of the IPO market this year," said Kathleen Smith of IPO research firm Renaissance Capital.

"Investors had a strong interest in GoodRx due to its 50%+ revenue growth and superior 40%+ EBITDA margins."

GoodRx posted $257 million in revenue for the first six months of 2020, up from $173 million a year earlier. Net income totaled $55 million, compared with $31 million last year.

The California-based company gathers information for more than 70,000 US pharmacies to track drug prices and offers discount coupons. It makes money by charging fees to partnering pharmacy benefits managers.

Silver Lake owned a 35.3% stake in the company before the offering, GoodRx's filing showed.