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Teladoc CEO Jason Gorevic is out at the company he has led for almost 15 years.
The Purchase, New York-based telehealth company on Friday announced Gorevic’s immediate departure. Mala Murthy, the company’s chief financial officer, is stepping in as interim CEO while the company’s board searches for a CEO. Murthy has been with Teladoc since June 2019.
In a letter sent to employees Friday, Murthy said Teladoc remains in strong financial position. The company reiterated its guidance for the first quarter and full year.
Gorevic has been with Teladoc since June 2009 and oversaw its growth from a small startup to one of the more well-known digital health companies. The company began trading on Nasdaq in July 2015, one of the first telehealth startups to test the public markets.
He also was a member of the board.
Teladoc grew during Gorevic’s tenure due to rising consumer interest in virtual care and more favorable telehealth payment rules put in place during the COVID-19 pandemic. The year it went public, Teladoc generated $77 million in revenue compared with $2.6 billion in 2023.
The company acquired Advance Medical for $352 million in June 2018 and InTouch Health for $600 million in January 2020. Its June 2015 acquisition of BetterHelp, a consumer mental health therapy provider, for $4 million may have been its biggest win. BetterHelp generated $1.1 billion in revenue for Teladoc last year.
The company has struggled since its $18.5 billion acquisition of digital health tech company Livongo in October 2020. In 2023, Teladoc posted a net loss of $220 million, or $1.34 per share, compared with a net loss of $13.7 billion, or $84.60 per share, in 2022. The loss in 2022 was largely tied to impairment charges from the Livongo acquisition.
Teladoc laid off 300 employees in January 2023 and an undisclosed number of employees in January of this year.
In its February call with financial analysts, Gorevic said the company was expanding efforts to sell BetterHelp virtual therapy subscription services to consumers in Canada, the United Kingdom and other predominantly English-speaking countries, partly because of its struggles with the price of advertising in the U.S. to obtain new customers.
The cost of advertising is one reason why Teladoc has scaled back consumer acquisition spending and focused more on its enterprise business for health systems, insurers and employers.
KeyBanc Capital Markets managing director Scott Schoenhaus said in an analyst note sent after Gorevic’s departure was announced that investors will view the move as a positive because of the company’s execution challenges in recent years. He said a new CEO should move the focus away from BetterHelp into its enterprise business, which he said was less volatile.
Teladoc’s stock opened Friday at $13.98 a share, down 27 cents from Thursday’s close. At its peak in February 2021, it was trading at $292.51 per share.
This article originally appeared in Modern Healthcare.
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Gabriel Perna , 2024-04-05 18:54:25
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