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Epocrates (EPOC), a provider of mobile drug reference tools to healthcare professionals, priced its IPO on 1st Feb., above the expected range at $16 per share, with a first-day return of 37.3%.

Business Overview (from prospectus)

Epocrates is a leading provider of mobile drug reference tools to healthcare professionals and interactive services to the healthcare industry. Most commonly used on mobile devices at the point of care, our products help healthcare professionals make more informed prescribing decisions, enhance patient safety and improve practice productivity. Our user network consists of over one million healthcare professionals, including over 300,000, or over 45% of, U.S. physicians. We offer our products on all major U.S. mobile platforms including Apple® (iPhone®, iPod touch® and iPad®), Android™, BlackBerry®, Palm® and Windows® Mobile devices. To date, we have worked with all of the top 20 global pharmaceutical companies by sales and over 350 individual pharmaceutical brands to engage with healthcare professionals through our interactive services.

Offering: 5.4 million shares at $16 per share. Net proceeds of approximately $28.6 million will be used to pay cumulative dividends on preferred stock.

Lead Underwriters: J.P. Morgan (JPM), Piper Jaffray (JEF)

Financial Highlights:

Revenues increased $7.5 million, or 11%, for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009...Cost of revenues increased $1.4 million to $23.3 million for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009...Sales and marketing expense increased $5.7 million, or 35%, for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009...Research and development expense increased $4.0 million, or 38%, for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009...Net income decreased $3.0 million, or 73%, to $1.1 million for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009...

Competitors

We believe no one company exactly replicates our services or our business model. However, the markets we participate in are competitive and dynamic. These markets are also subject to developments in technology and the healthcare industry. Currently, we compete with other companies in two primary areas—for users of the types of clinical information we offer, and for budget dollars from our pharmaceutical clients. Healthcare professionals choose to use mobile, online and print media to reference clinical information. All of these media compete for the attention of healthcare professionals primarily on the basis of providing access to relevant and reliable clinical information as well as the compatibility on mobile platforms. Our mobile and online drug and clinical reference tools face competition from Medscape, a division of WebMD, LLC (WBMD), and UpToDate Inc., among others.

Additional Resources:

Source: Epocrates Prices IPO Above Range