Two Health-Tech Companies Join Parade of IPOs With Strong Debuts

Livongo Health Inc. and

Health Catalyst

HCAT 50.65%

two rare health-technology firms joining the march of billion-dollar companies into the public markets, rallied in their trading debuts.

The pair are the latest companies to go public this year with a warm reception. The firms, which trade under the symbols LVGO and HCAT, jumped 36% and 51% on Thursday, respectively.

Both companies had priced their IPOs above their already-boosted projections and sold more stock than originally expected.

Livongo, which offers hardware technology and a software platform to manage chronic conditions such as diabetes, raised roughly $355 million in the IPO, after pricing at $28 a share. It closed at $38.10 and is valued at roughly $4.4 billion on a fully diluted basis.

Health Catalyst, a health-data company, was priced at $26 and closed at $39.17; it raised $182 million. The company’s valuation stands at roughly $1.6 billion.

So far this year, as of Tuesday’s close, 122 companies not including Livongo and Health Catalyst had made their debuts on U.S. exchanges, raising $42.3 billion, the most by companies going public year to date since 2000, according to Dealogic.

Livongo and Health Catalyst are two of the last few notable IPOs before a likely summer lull expected to be broken in September by the office-space manager WeWork Cos.

From Uber to Lyft to Airbnb, it is the year of the tech initial public offering. Jonathan DeYoe, a Bay Area financial adviser to some of the new IPO millionaires, explains how many of his clients acquired so much stock and what he suggests they do with their new riches. Illustration: Timothy Wong for The Wall Street Journal.

Investors have been racing to buy fast-growing new issues this year, with several companies, including Zoom Video Communications Inc.,

CrowdStrike Holdings


Adaptive Biotechnologies

, more than doubling on their first days of trading.

The public markets have been far less receptive to slower-growing, money-losing companies that are highly valued in the private market: Ride-sharing companies



Uber Technologies

both trade below their IPO prices.

The public performances of Livongo and Health Catalyst, which are seen as a litmus test for the digital-health sector overall, show that investors valued them more as technology companies than health-care companies, which typically trade at lower multiples of their sales.

“We had to overcome the fact that a lot of the tech investors really said we’ve been burned in health care and a lot of health-care investors said we’ve been burned in tech,” Glen Tullman, Livongo’s executive chairman, said in an interview Thursday.

Livongo and Health Catalyst are different businesses in a broad sector that includes telemedicine, genetic sequencing and consumer-wellness apps. Livongo brings to public markets technology to monitor blood sugar for people with diabetes, while Health Catalyst makes its debut with a business built on analysis of patients’ health records.

This year is the first since 2016 that any digital-health company has gone public, according to research from seed investor Rock Health.

Many have secured record amounts for themselves from investors recently, but given the regulatory hurdles and complexity of health insurance, few have been able to achieve the levels of venture-capital investment and customer growth of other banner-name tech companies.

Health Catalyst Chief Executive Dan Burton said in an interview that the company often started its pitch to prospective technology-savvy investors in its stock by explaining reasons for health care’s slow embrace of technology. “Some of what we talk about is going to feel like falling off a log to you,” the Health Catalyst team told investors less familiar with health care, Mr. Burton said.

Healthy Offerings

Livongo and Health Catalyst are two rare digital-health IPOs.

Mountain View, Calif.-based Livongo offers cloud-based glucose monitoring to patients with diabetes, selling its services to employer-sponsored health plans and insurers. It has moved into treatment of cardiovascular diseases, weight loss and mental health.

Health Catalyst, based in Salt Lake City, develops software to pool and analyze patient records from hospitals and health-care companies to identify waste and improve care. “There is a foundational problem in health care, the problem of waste,” Mr. Burton said. “The only way you can get that, know what to fix and how to fix it, is with data and advanced data-analytics capabilities.”

Launched more than 10 years ago, Health Catalyst has amassed 100 million patient records that can be mined for discoveries, according to the company. It recently launched a business to contract with drugmakers to use some of their data for research, after removing information that could identify patients.

For Livongo, Mr. Tullman said, its IPO is currency for potential acquisitions as well as a key branding event.

“Now, across the executive suites in America, CEOs are going to look and say, ‘Hey, this company Livongo, are we using them to control health-care costs?’”

Write to Maureen Farrell at and Melanie Evans at

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