Membership-based primary care company One Medical filed for an IPO. The company lets patients book appointments and communicate with their providers online.
A San Francisco-based primary care startup with big backers in tech filed for its initial public offering on Friday. One Medical, founded in 2007, much resembles concierge medicine. Its primary clinics are membership-based, doctors can be emailed directly, and its offices resemble a spa more than a waiting room. But unlike its concierge counterparts, One Medical’s prices are much lower: the company charges just $200 per year for its services.
One Medical applied to have its stock listed on Nasdaq as ONEM, with J.P. Morgan and Morgan Stanley as underwriters. It has not yet disclosed the price range or number of shares it will offer.
The startup is valued above $1 billion, and has raised more than $500 million to date, with big backers including GV (formerly Google Ventures) and private equity firm the Carlyle Group. The company said it keeps costs low by using its own technology, which it claims reduces the amount of time its physicians spend in records systems and lets patients schedule appointments through a mobile app.
One Medical has grown its revenue and membership numbers in recent years, but is still operating at a loss, according to a prospectus filed by parent company 1Life Healthcare Inc. The company’s net revenue increased from $176.8 million in 2017 to $212.7 million in at the end of 2018, but its net loss increased from $31.7 million to $45.5 million during the same period.
Notably, a significant portion of One Medical’s revenue still comes from fee-for-service care. As of the end of September, just under half of its total revenue stemmed from memberships and partnerships with other health networks, while the remainder was from fee-for-service payments from insurers or patient, according to its prospectus.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
One Medical currently has 77 offices in nine markets, including Boston, Chicago, Los Angeles and New York. It had a total of 346,000 members at the end of 2018. The company also offers memberships as an employee benefit, with 6,000 enterprise clients at the end of September. It plans to enter three new markets in 2020.
The health startup snagged former UnitedHealth Group Vice President Amir Dan Ruben as its CEO in 2017. Ruben also previously served as CEO of Stanford Health Care. One Medical’s founder. Dr. Tom X Lee, resigned from the company’s board of directors in August after running it for a decade.
Photo Credit: One Medical
