Drugstore.com draws $90 million in initial offering

Selling 5 million shares at $18 each, the Net pharmacy is the latest health offering to meet strong demand.

BELLEVUE, Washington--Drugstore.com, an online pharmacy, raised $90 million in an initial stock sale, the latest health offering to meet strong demand.

The Bellevue, Washington-based company sold 5 million shares at $18 each. The shares were priced $1 above the top of the $15 to $17 range set by Morgan Stanley Dean Witter, which handled the sale. Morgan Stanley raised the expected range from $9 to $11 yesterday.

The sale represented a 12-percent stake and gave the 15-month old company a market value of $763.5 million.

"Online health offerings have been especially hot deals this year, and Drugstore.com should be no exception," said Steven Tuen, director of research for IPO Value Monitor.

Healtheon, which links doctors, insurers, and patients through the Internet, remains one of this year's best-performing IPOs. It almost quadrupled in its first day of trading, in February. Drkoop.com, an Internet site founded by former U.S. Surgeon General C. Everett Koop, more than doubled in its first day, in June.

Drugstore.com has sold its products to about 168,000 customers, the company said. The company's pharmacists can advise customers on drugs and fill prescriptions. Customers also can have products such as toothpaste, shampoo, and homeopathic remedies delivered to their houses.

Drugstore.com lost $30.4 million for the first six months this year, on sales of $4.2 million. The company had no revenue last year.

Peter Neupert, Drugstore.com's chief executive, worked at Microsoft for more than a decade, including as vice president of news and publishing for interactive media.

Jeff Bezos, the founder and chief executive of Amazon.com, is a member of Drugstore.com's board. So are John Doerr and Brook Byers, both partners with Kleiner Perkins Caufield & Byers, a Silicon Valley venture capital firm.

Melinda French Gates, a former Microsoft executive and the wife of Microsoft chairman Bill Gates, is expected to be appointed to the board after the sale.

Copyright 1999, Bloomberg L.P. All Rights Reserved.

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