Imaging AI vendor Heartflow raises $364M from ‘upsized’ public stock offering
Imaging artificial intelligence vendor Heartflow has raised $364 million from its initial public stock offering, the company announced Monday.
Based in Mountain View, California, and founded in 2007, Heartflow had originally hoped to raise about $100 million from the IPO. However, amid “upsized” interest, that figure has tripled, with the company selling 19,166,667 shares at $19 a pop.
Heartflow provides a noninvasive cardiac test that creates a personalized 3D model of a patient’s arteries using CT scans. It’s experienced significant financial gains since commercialization in 2015, scoring nearly $126 million in revenue last year, a 44% year-over-year jump. Heartflow estimates the current market opportunity for its products is over $5 billion, with the company targeting radiologists and other physicians to boost its numbers.
“We believe the Heartflow platform adds significant value across all the subspecialties that impact cardiovascular care including referring cardiologists, imaging physicians, and interventionalists,” it said in a prospectus filed with the U.S. Securities and Exchange Commission on Aug. 8. “We have structured our sales force to efficiently call on these key physician stakeholders, with a primary focus on the imaging physicians who are instrumental in new account adoption and the referring physicians who are critical to driving volume growth at accounts in our installed base.”
Heartflow’s stock officially started trading on Friday and was up 50% following the opening, trading at $29.99. The successful IPO places its enterprise value at roughly $2.27 billion, Reuters reported. Heartflow said last month it planned to use proceeds from the stock offering to pay down debt, fund sales and marketing efforts, along with research and development, and for other general corporate purposes.
The IPO follows building momentum for Heartflow and its competitors, which include Cleerly and Elucid. Last month, radiology benefits manager EviCore recommended that health plans reimbursement for AI that assesses heart scans. UnitedHealthcare, the country’s largest commercial insurer, followed suit shortly after, committing to covering such software nationwide. Last month, the Medicare Physician Fee Schedule also proposed a CPT code and $1,000 payment for CCTA AI.
Heartflow posted a quarterly loss of $32.3 million for the three months ending March 31 compared to a $20.9 million loss one year earlier. The deficit was driven partially by large spending on research, development, sales and marketing, along with challenges achieving adoption, according to previous reports. Heartflow also attempted to go public in 2021 via a $2.4 billion transaction, but scrapped the idea due to “unfavorable market conditions” amid the pandemic.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.