Digital health public offerings continue with Amwell and Talkspace announcing public exit plans

After some called 2020 the “biggest year for IPOs,” analysts predicted the wave of digital health public offerings to last into the new year.
By Mallory Hackett
11:49 am
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After some called 2020 the “biggest year for IPOs,” analysts predicted the wave of digital health public offerings to last into the new year.

Last year’s surge of digital health companies hitting the stock exchange appears to be continuing into 2021, as both Amwell and Talkspace announced public exit plans this week.

First up is Amwell, which announced Tuesday that it has created a proposed public offering to extend 11,280,647 shares of its Class A common stock to the public. Additionally, the underwriters will be given a 30-day option to purchase up to 1,692,097 supplemental shares of Amwell’s stock at the public offering price. Amwell will not receive any proceeds from this offering.

Next is Talkspace’s merger with special purpose acquisition company Hudson Executive Capital LP to go public in a deal worth $1.4 billion. The combined company will operate as Talkspace and will be listed on NASDAQ under the symbol TALK.

As a part of the deal, Talkspace will receive $250 million to be used for growth capital. The company will keep its existing leadership team, plus the addition of Douglas Braunstein, the founder and managing partner of Hudson Executive Capital, as chairman of the company's new board of directors.

WHY THIS MATTERS

Following analysts at Mercom Capital Group calling 2020 the “biggest year for IPOs,” many, including MobiHealthNews, predicted more activity among digital health companies in the public marketplace this year.

“COVID-19 supercharged funding activity in digital health in 2020. Ten digital health categories had their best year with record funding amounts. It was also the biggest year for IPOs with six digital health companies raising over $6B. We could see a lot more companies going public in 2021 if the current IPO and SPAC boom continues,” Raj Prabhu, CEO of Mercom Capital Group, said in a statement last week. "The pandemic has mainstreamed the consumer side of digital health technologies in less than a year. Digital health products that were a novelty a year or two ago are now a necessity."

Talkspace’s entrance into becoming a publicly-traded company puts it in a strong position to grow, according to Oren Frank, the cofounder and CEO of Talkspace.

"Roni and I started Talkspace nine years ago to establish a next-generation technology company, exclusively focused on behavioral health, with the mission of opening up access to mental healthcare, improving clinical outcomes, and helping those in need live happier and healthier lives. Today, this mission is more important than ever before.

"We are proud of the positive impact Talkspace has made and are excited for the next phase in the company's journey. Hudson Executive's experience and relationships in healthcare, expertise in capital markets, and alignment with our mission will be invaluable as we continue to grow, innovate and improve mental health outcomes."

This marks Amwell’s second public offering after the company made its debut on the New York Stock Exchange in September with an upsized initial public offering of about 41.2 million shares of Class A common stock at $18 per share.

THE LARGER TREND

Amwell CEO Dr. Roy Schoenberg recently sat down with MobiHealthNews to discuss 2020 and what’s in store for the future. He expects to see telehealth usage continue, especially for chronic condition care management.

As for the future of Amwell, Schoenberg was tight-lipped when it came to rumors that the company was looking into a deal with chronic care company Omada. He did say, however, that he could see the digital health industry benefiting from acquisitions and partnerships to fill different needs.

Talkspace, meanwhile, was recently awarded nearly $7 million in grants from the National Institutes of Health to conduct research on telepsychiatry. The company will complete two studies: one to gauge the effectiveness of the different forms of care it offers and another to investigate the types of traits among patients who benefit the most from digital therapy.

 

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