Healthcare software company Orion Health Group began trading on Wednesday on the New Zealand Stock Exchange (NZX) and Australian Securities Exchange (ASX) following an initial public offering (IPO) of NZ$125 million, including NZ$120 million in new capital.
Strong demand saw the shares priced at NZ$5.70, at the top of the pre-IPO indicative price range. However, shortly after opening, they were trading as high as NZ$6.60.
Orion undertook the offer to raise funds for further research and development.
"We are now funded to significantly increase our research and development efforts to expand our capability and solutions for customers, and I am very excited that many of these great new roles will be in the New Zealand IT sector," founder and chief executive Ian McCrae said.
Orion already claims 450 customers across 25 countries; however, McCrae said the huge increase in health data likely to flow from new devices and the demands of patients for greater control over their own healthcare are driving rapid change.
In Orion's investment statement, McCrae said the health industry is on the "cusp of the next revolutionary shift", created by the proliferation of healthcare data and the application of IT to that data.
"We call this shift 'the health data revolution'. In our view, a key to the health data revolution is the development of software that captures and analyses healthcare information for entire populations to assist clinicians to create precise and informed healthcare plans for individuals," he said.
This will reduce the need for expensive treatments and contribute to controlling healthcare costs.
"The health data revolution presents the single largest opportunity in Orion Health's history. We believe we are well placed to be an early leader in the emerging global population health management market, as our Healthier Populations solution group and expertise in managing health data across regions should give us a competitive advantage in attracting payers and providers to our software," he said.
The most significant opportunity is in the US market, he added.
"Approximately one third of all United States healthcare expenditure is funded through payers. They are now starting to partner with providers, and are looking to utilise fully integrated software systems to ensure that care is provided to their members as efficiently as possible."
However, capturing the opportunity requires an acceleration in development spending and a "large increase in employee numbers".
That appears to be happening even before the share offer.
Orion reported sales of NZ$83 million for the six months ended September 30, 2014, up from NZ$69 million for the same period of 2013.
However, expenses grew significantly as well, up from NZ$73 million to $103.9 million, driven by increased employee costs. That drove Orion to a total loss of NZ$13.6 million for the period from NZ$4 million in the same half of the previous year.