Drugstore.com files $67.5M IPO; CVS acquires Soma.com
Drugstore.com files $67.5M IPO; CVS acquires Soma.com
By DON LONG
Healthcare InfoTech Managing Editor
Drugstore.com (Belleveue, WA), an Internet-based pharmacy that aspires to do for drugstore products what Amazon.com has done for books, on Wednesday filed with the Securities and Exchange Commission an initial public offering of common shares scheduled to raise $67.5 million.
That aspiration has some considerable support, since Amazon.com holds a 40% stake in Drugstore.com, and the company’s SEC filing says that Amazon.com will purchase $10 million of Drugstore.com stock. That purchase will be made in a concurrent public offering that isn’t being underwritten.
Additionally, Drugstore.com has an interest in this week’s linkup of Healtheon and WebMD, since it has been named by Healtheon as the preferred pharmacy on its consumer health portal. That partnership was announced last month.
Morgan Stanley Dean Witter, Donaldson, Lufkin & Jenrette and Thomas Weisel Partners LLC are underwriting the drugstore.com IPO.
Just as various Internet companies are scrambling to get an armlock on the Internet health information and transactions market, drugstore.com is in pitched battle for market leadership in drug sales estimated at about $150 billion annually via the web.
Earlier in the week, the CVS (Woonsockett, RI) drugstore chain, the largest such chain in the U.S., purchased Soma.com for $30 million. While CVS operates its own web site, it clearly feels the need to boost its online profile. Soma.com claims to have been the first Internet company to develop a pharmacy site. The site was launched this past January.
CVS’s purchase of the site offers a new kind of vertical integration to the pharmaceutical industry in that it integrates a brick-and-mortar site with an electronic dimension. Customers will be able to order a prescription online and then pick it up at one of the 4,100 stores operated by CVS. As with others in the sector, CVS is probably attempting to develop other online alliances.
Another competitor in this particular field is PlanetRx (South San Francisco, CA), launched by Bill Razzouk, a former executive at America Online.
The new web pharmacies will, of course, be challenged by Internet sites being launched by the country’s other drugstore operations..
Drugstore.com reports offering more than 17,000 brand-name health, beauty, wellness, personal care and pharmacy products, a variety of information resources, personal services and a licensed pharmacy, all provided online.
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