Healtheon Corp. –

SANTA CLARA, Calif. Healtheon Corp., a developer of an Internet-based platform that facilitates and streamlines the interaction of health-care professionals, held an initial public offering February 10, offering 5 million shares at $8 apiece. The company’s stock priced above its $6 to $7 filing range.

The IPO, underwritten by Morgan Stanley Dean Witter, Goldman Sachs & Co., Hambrecht & Quist and Volpe Brown Whelan & Co., left 68.94 million shares outstanding.

There were no selling shareholders. Kleiner Perkins Caufield & Byers, SmithKline Beecham Clinical Laboratories Inc., SFA L.P., New Enterprise Associates and Integral Capital Partners were venture backers.

Healtheon’s “virtual healthcare networks” (VHNs) include a suite of services delivered through applications on the company’s Internet-based platform, including health care enrollment, eligibility determination, referrals and authorizations, laboratory and diagnostic test ordering, clinical data retrieval and claims processing.

The company will use the approximately $36.3 million in proceeds from the offering for possible acquisitions of other businesses, products or technologies, as well as general corporate purposes.

Healtheon has never been profitable, losing $35.86 million in the first nine months of 1998 and $28 million in 1997.

C. Richard Kramlich, founder and general partner of New Enterprise Associates, joined the company’s board of directors in July 1996, followed a year later by L. John Doerr, a general partner at Kleiner Perkins, and in May 1998 by Tadatka Yamada, executive director of SmithKline Beecham HealthCare Services.

Healtheon – Selected Financial

(in thousands, except per share data)

Year Ended December 31, Nine Months Ended September 30,

1995 1996 1997 1997 1998

Revenue 2,175 11,013 13,390 7,000 33,231

Net loss -4,458 -18,606 -28,005 -21,273 -35,860

Net loss per share -0.85 -2.83 -3.88 -3.03 -1.24