Weekend theme: S-1s

$GDRX peaked my interest.

THREAD TIME!

Problem w/healthcare:

"No guidance for what healthcare should cost with or without insurance" -Co-CEO Doug Hirsch

Leads to higher costs so that in USA:
-2/3 avoid care entirely
-20-30% of scripts are left at counter
-25% have no doc

Resulting unfortunate consequences:

For us: American dies every 4 mins from not taking prescribed medicine as directed

For Health system: 30% of ER visits could have been treated in other care settings. ER visits are expensive for all parties.

For pharmacies: Loss of sales

The opportunity: "Inefficient, massive market that Americans have no ability to navigate... what’s true for prescriptions is true across healthcare." -Hirsch

Enter $GDRX w/solutions driving "script adherence, faster treatment, & better outcomes" thanks to broader access

The size of the opportunity: $800B

-$524B TAM prescription opp
-$250B TAM telehealth opp (thanks @heydoctorco)
-$30B TAM pharmaceutical manufacturer opp

$GDRX: "Category-defining products delighting users for years" to capture market via:

1) reducing script cost by 70%+
2) enabling users to see doc to fill script remotely w/in hour
3) serving 150 conditions
4) growing telehealth offerings
5) script delivery

No insurance needed

4 business segments (68% of providers recommend):

1) GoodRx Prescriptions
2) @heydoctorco Telehealth Marketplace
3) GoodRx Manufacturer Solutions
4) GoodRx Gold Subscriptions

Saved Americans $20B to date on healthcare & made scripts newly affordable for 18M Americans!

Description of Manufacturer Solutions business:

Pharmaceutical manufacturers provide discounts via co-pay cards & assistance programs.

$GDRX partners with them to integrate and market these solutions on the $GDRX platform.

Description of GoodRx Gold Subscriptions:

Savings program for $5.99/person or $9.99/family for more savings.

90% savings off standard list prices

Mail order feature at no incremental charge.

Subs contribute 2x more to the top line for $GDRX

Subs up 15x from 2018 to 2020

Not just consumers benefitting:

1) Pharmacies gain traffic from consumers now able to afford medicine

2) Healthcare professionals are judged by patient outcomes which $GDRX is directly improving with access and affordability

3) And yeah we save a ton

More subtle edges:

-Leader in scale & brand awareness for aggregating script pricing
-Scale coincided w/more savings for customers (4M+ monthly users)
-Combination of pharmacy savings & @heydoctorco telehealth service driving care access
-4.8/5 app score thanks to a great UI

Impressive growth:

-CAGR of 57% since 2016
-2019 revs up 55% to $388M
-Revs up 48% 1st half of 2020 to $256M
-Most downloaded health app on $AAPL app store & $GOOG Play app store for 3 yrs

Mouth-watering operating leverage:

-2018 op margin: 31%
-2019 op margin: 36%
-2020 1st half op margin: 38%

-2019 op CF: 83M up 84% YoY
-Generated 83M in op CF already this yr

-100M in FCF 1st half of 2020 up 257% YoY

-2019 NI up 50% to $66M
-NI up 77% 1st half of 2020

Threats:

$AMZN owns @PillPack. This is direct competition for the pharmacy biz.

$TDOC is a telehealth giant. @Amwell another going public. There are many more.

$CVS & $WBA could theoretically do this themselves but it has been 10 years so...

Leadership:

Founder led! Woohoo!

Doug Hirsch co-founder & co-CEO. Previously with @Yahoo & $FB

Trevor Bezdek co-founder & co-CEO. co-founded @bioware

Here are the @Glassdoor ratings... enough said https://www.glassdoor.com/Reviews/GoodRx-Reviews-E1138304.htm

I'm excited for this one.

I love companies that profit by making the a better place. $GDRX clearly does both.

Need to see where the valuation shakes out when it debuts.

But again, I really like this one and will own it eventually.

S1:

https://www.sec.gov/Archives/edgar/data/1809519/000119312520234662/d949310ds1.htm#rom949310_11

On the $CVS $WBA as possible competition front:

Neither has larger than a 15% share of pharmacies in USA.

$GDRX would have to aggregate 16% of pharmacies to build a competitive moat neither party could match alone.

$GDRX has 68% of pharmacies on its services today.

Decided I will be adding to this on day 1 if the valuation comes in below $15B. Most recent raise was @ 2.6B but ya never know... lot of excitement for this one.

And completely forgot:

@jablamsky note on $GDRX gets the credit/procuring cause for this thread/opinion. Thank you!