Medidata Solutions (New York), a global provider of hosted clinical development solutions, became one of the first companies involved the med-tech sector to test the IPO waters in a long time when it reported the pricing of its initial public offering of 6.3 million shares of common stock at $14 per share for estimated net proceeds of about $75.9 million, after deducting underwriting discounts and commissions and estimated offering expenses.
In addition, selling stockholders have granted the underwriters a 30-day option to purchase up to 945,000 shares of common stock at the initial public offering price to cover any over-allotments.
Medidata's common stock began trading on the Nasdaq Global Market today, under the ticker symbol MDSO.
The company said in its SEC filing that it expects to use the net proceeds for general corporate purposes, including working capital, capital expenditures and potential acquisitions. It said it may also repay all or a portion of its $14.6 million senior secured credit facility, plus accrued interest and any fees relating to our prepayment, in the event that it is unable to restructure the credit facility or obtain alternative debt financing on more favorable terms.
The company's customers include pharmaceutical, biotechnology and medical device companies, academic institutions, contract research organizations (CROs), and other organizations engaged in clinical trials to bring medical products to market and explore new indications for existing medical products.
The company's principal offering, Medidata Rave, is a platform that integrates electronic data capture (EDC) with a clinical data management system in a single solution that replaces traditional paper-based methods of capturing and managing clinical data.
Medidata, which began providing EDC services in 2001 said in its SEC filing that it has had operating losses in each year from 1999 through 2008, and its cumulative operating loss since 1999 totaled about $86.3 million as of Dec. 31, 2008. The company also reported that it has identified a number of material weaknesses in its internal controls over financial reporting.
While the company said it has initiated a remediation plan to address these issues, it has only limited operating experience with the remedial measures that have been implemented to date due to these problems, the company said it has had to restate its consolidated financial statements for the years ended Dec. 31, 2005, 2006, 2007 and 2008.
Citigroup Global Markets and Credit Suisse Securities were joint bookrunning managers for the offering. Jefferies & Co. and Needham & Co. were co-managers.
In other financings news, Medical International Technology (MIT; Denver) reported that it has received a $500,000 private placement from its Chinese partners and a new order of 200 units.
The private investment was done based on two issuances; the first for a total of $250,000 at $0.10 and the second $250,000 at $0.14. This investment and the new order show the beginning of a strong commitment and a step toward a successful long-term relationship between MIT and its Chinese partners, MIT said.
Jiangsu Hualan MIT Medical Technology (MIT China) is actively promoting and selling MIT's Agro-Jet needle-free jet injector for animal application, and Med-Jet for human application, and is in the process of obtaining certification for the production and sales of both models.