Aug 6 – Oak Street Health Inc’s shares doubled in their New York Stock Exchange debut on Thursday, after the primary care provider sold shares to investors in its $328 million initial public offering (IPO).
The stock opened at $42.50, soaring 102% above its IPO price of $21.00 per share.
Oak Street, which runs primary care centers for adults on Medicare, sold 15.6 million shares and the IPO valued the company at $5 billion.
The Chicago-based company had initially aimed to sell shares at between $19.00 and $20.00 per share.
Founded in 2012, Oak Street Health receives a per-patient-per-month payment from insurers, but also shares in the risk for patients’ healthcare costs.
The company said this month that it expects the COVID-19 pandemic to raise its medical claims expense, with about 3% of its at-risk patients at the end of May showing symptoms that suggested possible COVID-19 infection.
This has left Oak Street financially responsible for their healthcare costs.
Oak Street, however, also said limited access for its other patients to healthcare specialists such as cardiologists and orthopedists during the pandemic will result in lower healthcare costs than it would have otherwise expected.
The company currently operates more than 50 centers in the United States, with plans to expand into New York and Mississippi this year.
J.P. Morgan, Goldman Sachs & Co. LLC, Morgan Stanley, William Blair and Piper Sandler are among underwriters for the IPO. (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Shailesh Kuber)