Omada Health, a digital chronic condition management company, made its public debut on Friday with its IPO. This marks the second recent digital health IPO after a period of stagnation in the sector. The company opened at $23 per share, a 21% increase over its public offering price of $19 per share.
Founded in 2011, Omada Health has received significant venture capital funding and offers digital management programs for conditions such as diabetes, obesity, and hypertension. They provide care teams to work with patients in creating treatment plans and provide them with connected devices like blood pressure cuffs and digital scales.
After filing for its IPO in May, Omada is now trading on Nasdaq under the ticker symbol “OMDA” and raised $150 million in its IPO. The company’s public offering price was set at $19, which was in the middle of the expected range released the day before.
The digital health sector has seen a lack of public offerings in recent years, but there has been a surge of companies going public in 2021. However, many of these companies, especially those that used mergers with special purpose acquisition companies, did not perform well and may have been better off as strategic M&A targets.
Despite this, experts believe that more digital health companies may follow suit this year, as seen with Omada and Hinge Health, another virtual musculoskeletal company that recently went public. Hinge Health opened 23% above its public offering price, providing a positive momentum for the sector.
While Hinge Health’s initial gains diminished post-IPO, its performance still had a positive impact on Omada’s pricing. However, the decision for digital health companies to go public is also influenced by larger macroeconomic conditions. Companies need to consider their operational readiness and market conditions before making the leap to the public markets.
In conclusion, Omada Health’s successful IPO is a promising sign for the digital health industry, indicating potential growth and opportunities for other companies in the sector. As the market continues to evolve, companies will need to carefully assess their readiness for going public and navigate the ever-changing landscape of the healthcare industry.
