Epocrates (NASDAQ:EPOC) provides a mobile drug reference tool which is used by healthcare professionals to improve the speed and quality of prescription decisions. The tool is used by more than 1M healthcare professionals. Of this 1M, over 300,000 are US physicians, which means that Epocrates is used by over 45% of US doctors. The tool can be used on all of the main US mobile platforms. Epocrates makes money by allowing healthcare companies to advertise to the healthcare professionals across the network and by selling premium versions of the reference tool to healthcare professionals.
Epocrates attempts to solve 3 main issues with the healthcare industry. First, physicians require a streamlined method for dealing with the administrative complexities, changing regulations, and the constant development of new information associated with the prescription drugs. Next, pharmaceutical companies want a way to more effectively reach physicians. In 2008, pharmaceutical companies spent more than $12.8B on promotional activities. Finally, the US government passed the Health Information Technology for Economic and Clinical Health Act (HITECH) which will distribute $19.2B in government subsidies to implement Electronic Health Records by 2019. Epocrates believes that its products helps to solve these 3 main desires.
The company's initial public offering of stock on the NASDAQ occurred on February 1, 2011. The company offered 5.4M shares each for $16. This was above the initial price range for the deal was $13-$15. This brought the offer to $86M. The lead underwriters of the deal were J P Morgan Chase (JPM) and Piper Jaffray Companies (PJC).
In 2009, Epocrates total revenue for the full year was $94M. This was a 13% increase over the 2008 figure. For the first 9 months of 2010, the company reported a total revenue of $74M. In 2009, the company's net income was $7.7M. For the first 9 months of 2010, the net income was $1.1M, 74% below the net income for the same period in 2009.