Medsite mention (small) in this article...
David Raine
Vancouver
SAN DIEGO, Sep 29, 1999 (BUSINESS WIRE) --
INTERNET STOCK NEWS(TM): Sept. 29, 1999
"Healthy Investing" by Mike Ogburn, ISN Writer
Health care is a thriving, trillion-dollar industry in the U.S., comprising approximately 7% of GDP annually. As demographic studies point towards a general aging of the population, both attention to the area and health care spending can be expected to grow dramatically. Investors wanting to add explosive Internet growth to the prescription have a variety of choices.
There are many publicly traded health care Web sites with different focuses as they attempt to carve out a piece of this market. Sites range from being consumer-oriented to catering to the medical practitioner. Some are dedicated to Web access of health records and insurance management for individual providers, hospitals and HMOs. Others provide practitioner and hospital screening for the consumer. Many sites provide up to the minute medical studies and information to both segments. Drug industry information and interactions among medicines are listed. Increasingly, the larger sites are blending a mixture of many of these elements through acquisition of smaller players, and combining this information with interactive properties such as chat, message boards, and special support groups to attract both elements.
According to August Media Metrix figures, among the top viewed (publicly traded) medical Web sites were: drKoop.com (Nasdaq:KOOP), onhealth.com (Nasdaq:ONHN), WebMD.com (soon to be part of Healtheon (Nasdaq:HLTH)), and Medscape.com (Nasdaq:MSCP). Other sites in this category include Mediconsult.com (Nasdaq:MCNS) and HealthGate Data (HGAT -- pending this week). In addition, private and peripheral sites abound, such as thriveonline.com (Oxygen Media), intellihealth.com, discoveryhealth.com, and iVillage (Nasdaq:IVIL). Here's a rundown on the top sites and their Internet attractiveness.
drKoop.com, founded by the former Surgeon General, by far attracts the most eyeballs. Their focus is mainly on the patient/consumer, with a revenue mix of advertising, e-commerce and content licensing. Through its Community Partner program, the site custom designs Web sites and enables localized chats for entities such as community hospitals and HMOs.
Patients can sign up for drug trials through a deal with Quintiles Transnational (Nasdaq:QTRN), a clinical drug-trial outsourcer for pharmaceutical companies. drKoop receives fees for referrals and additional fees if the patient is accepted into the program. drKoop has garnered viewers through its big-ticket content provider deals, including five of America Online's (NYSE:AOL) properties and Go2Net.
It's also tapping the online drugstore area, and currently has a deal with Drug Emporium (Nasdaq:DEMP) online. The site offers the usual array of enhancements, including chats, support groups, communities and interactive tools such as other health site reviews. KOOP went public on June 8 at $9, and came close to a first day double. From a high of $45, it now trades in its opening day range.
OnHealth also caters to the consumer, with an added bonus of live surgery broadcasts for the not too squeamish. Revenue is obtained through advertising and content syndication. Its larger deals include AOL's Digital City, Snap.com, WebTV and Yahoo! (Nasdaq:YHOO). Through an alliance with Healthgrades.com (a subsidiary of Specialty Care Network -- (Nasdaq:SCNI)), OnHealth provides ratings of doctors, hospitals, and health plans.
OnHealth has a storied past beginning back in 1990, long before its Web site began. Affiliates of the group Van Wagoner Capital Management own almost 39%, for float checkers. It's trading way below it's high of near $23 this year -- the recent price was in the $6 range -- with a low of $2.
Both Medscape and HealthGate Data are special situations in that they intend to begin trading this week. Medscape's focus is mainly on the professional, with a bit of consumer thrown in. Medscape wants your physician's Web site as well. Professional ongoing education is stressed through their online journal Medscape General Medicine. Consumer access is provided through AOL, and will also begin through a special CBS Web site cbs.medscape.com.
Bells and whistles include email and some diversions such as shopping for medical books, medical humor and crosswords. CBS recently purchased a 35% stake in the company and will advertise Medscape with $150 million worth of promotions over the next seven years. Two principals of the firm own another 35%. Underwriters include DLJ, BT Alex Brown and Bear Stearns.
HealthGate offers its own content as well as access to medical databases and journals. Consumers are targeted through an agreement with Access Health providing patient information brochures. No bells and whistles here -- just plain information. Executives own about 35% of the firm. The main underwriters are SG Cowen, Montgomery, and Volpe Brown.
WebMD almost went public until Healtheon scooped it up. WebMD is focused on the subscription-paying medical professional first, with a lesser consumer sideline. This site covers all the bases, including medical databases and journals, continuing education courses, medical bookstores and supplies, insurance eligibility checks, email, faxes, paging services, physician Web sites, and also a leisure content area (stock quotes included).
For patients there is a referral service and WebMD on call. Large investors include Microsoft (Nasdaq:MSFT), Intel (Nasdaq:INTC), CNN, duPont (NYSE:DD) and Excite@Home (Nasdaq:ATHM). Exclusive agreements have been inked with MSN sites, Lycos (Nasdaq:LCOS), and Excite. McKessonHBOC (NYSE:MCK) offers medical supplies on the site. Other deals include Sportsline (Nasdaq:SPLN), Dell (Nasdaq:DELL), Compuserve and Yahoo!.
Healtheon's aim is to put health care data on line, with access to all. A little content couldn't hurt. The purchase is due to close this month. Inside investors and founders own a large chunk of the stock, and pedigree names are associated with this one. From a high of $126, the stock has recently traded in $40's, off its low of about $22. Healtheon has the largest market cap in this field.
Mediconsult.com offers a different play in this field. Bermuda-based, it consists of a veritable doctor's bag of Web sites, each specific in nature, targeted towards the consumer. Patients are able to present a medical case to an expert for a fee-based diagnosis. The twist is that it uses information obtained from its various communities to further advise target-based advertising to its large clients (read: pharmaceutical companies).
The company recently acquired private PhysiciansOnline ( www.pol.net), a have-all ISP provider dedicated to -- yep -- doctors. It claims to have 25% of doctors in the U.S. signed up. The usual databases, medical updates, email and continuing education courses appear. The company has also begun a "Pharmacy on the Net" Program, targeting local community pharmacies in offering Web site access and promotions to their customers. The CEO owns -- gasp -- over 60% of the company. Trade that! The stock trades at a recent $8 from a high of $24. In October of 1998 one could have had shares for $.42.
Like a list of symptoms, the sites are numerous. Another publicly traded company is MedPlus (Nasdaq:MEDP) which provides information management systems to HMOs -- and hopes to take this to the Web. Look for consolidation in this field, and a proliferation of IPOs (Medsite.com and AmericasDoctor.com for two possibilities). A few thoughts: as more personal medical information is released for online access, privacy issues appear.
Sites that target health providers will necessarily need to be streamlined in nature due to the field's built-in time constraint. In targeting consumers, too much information is less of a concern, and perhaps is warranted for marketing purposes. With the increased emphasis on health issues, the market is certainly a growing one. As the doctor/patient relationship has been forever changed by the prevalence of HMOs, the consumer of health-related products and services has a ready-made gap for more information, which these sites provide. It's a growth industry, super-charged by the Internet, and definitely should be looked as an angle to be played by Internet investors in a part of their portfolio. |
