Dive Brief:

• Chronic disease management startup Livongo Health has hired a trio of high-powered investment banks to help it prepare for an initial public offering as early as the third quarter of this year, The Wall Street Journal reports.
• The company, which offers cloud-based glucose monitoring to diabetes patients via employer-based health plans, has engaged Morgan Stanley, Goldman Sachs and J.P. Morgan Chase to underwrite the IPO, which is expected to value the company at more than $1 billion, according to sources familiar with the dealings.
• Founded in 2014, Livongo has raised $240 million in six funding rounds. The latest, in April 2018, captured $105 million led by Kinnevik AB and General Catalyst.

Dive Insight:

Digital health IPOs have been few and far between in recent years. Chinese fitness tracker Huami raised $110 million in a NYSE IPO in February 2018. Before that, the last IPO appears to have been iRhythm in 2016. 

Livongo's planned IPO comes as digital health funding hit a record high of $8.1 billion across 368 deals last year, up from $5.7 billion the previous year, according to Rock Health. A report by Mercom Capital Group put the haul even higher, at $9.5 billion through 698 deals.

Livongo has been readying itself for expansion. Last year, the Silicon Valley startup named former Cerner president Zane Burke its new CEO, replacing Glen Tullman, who assumed the title of executive chairman. Tullman previously served as CEO of EHR giant Allscripts. The company also elevated chief medical officer Jennifer Schneider to president, a position that will oversee activities ranging from data science and software engineering to marketing and clinical operations.

Livongo currently has more than 600 employers enrolled in its chronic disease management programs, which include cardiovascular diseases, weight loss and behavioral health issues in addition to diabetes. Customers include Express Scripts and CVS, as well as four of the top seven payers.

The company has also teamed up with Abbott to offer the devicemaker's FreeStyle Libre Pro System to Livongo members with diabetes. The sensor, affixed to the back of the upper arm, reads glucose levels every 15 minutes to form a glycemic profile of the patient, including patterns and trends, that they can share with their doctor. The sensor is removed after 14 days.

In a December interview with MedTech Dive, Tullman said that Livongo's 2018 revenue would more than double to about $61 million.

With some 30 million Americans diagnosed with diabetes, Livongo has lots of potential marketwise, though it also faces competition. Startups like Bigfoot Biomedical and Sweetch are also vying for a piece of the diabetes management pie, as well as a number of more established companies. For example, Roche bought digital diabetes management platform mySugr in 2017, and Apple is said to be developing noninvasive sensors that can monitor blood sugar and help diabetics manage their disease.