Attempting to overcome a slumping IPO market brought on by the sagging economic situation, Mako Surgical (Fort Lauderdale, Florida) reported that it has priced its previously filed IPO to sell up to $86.25 million in securities (Medical Device Daily, Sept. 20, 2007).

The company, which hopes it will not receive the frosty reception met by many IPOs recently, said it was selling 5.1 million shares at between $14 and $16 a share. The company estimated that it will receive $68.4 million from the offering, assuming pricing at the midpoint.

The company said it would also give the underwriters the option to buy another 698,333 shares to cover over-allotments. Lead underwriters are J.P.Morgan and Morgan Stanley, and the co-managers are Cowen & Co. and Wachovia.

The IPO strategy in the healthcare sector has not been a sure thing so far this first quarter of 2008, and even when it has been used, some companies are finding there is much less money available than even a quarter ago, likely due to the looming specter of a U.S. recession.

Several companies that filed their IPOs in 2007 or in the past two months of 2008 have either said they would take less money than they expected or elected to postpone their offering until market conditions improve.

One company, Bioheart (Sunrise, Florida), developing cell therapy for regeneration of the heart, reduced the number of shares and lowered the pricing of its IPO, moves that greatly trimmed its original prospects for the offering.

Bioheart reported in mid-January (MDD, Jan. 16, 2008) that it is offering 1 million shares at a $6 to $8 a share. The estimated proceeds assume an offering price of $7 a share. And it has granted the underwriters a 30-day option to buy another 150,000 shares to cover over-allotments.

It said the net proceeds from the revised IPO would be about $5.5 million, and another $1 million if the over-allotment option is exercised in full.

That price was a reduction from its revised IPO, disclosed this past November, to offer 4.2 million shares at $6 to $8 apiece. Counting the over-allotment, that would have yielded a maximum of $38.3 million. (The company previously planned to sell as many as 4.1 million shares at $14 to $16 apiece, for a maximum of $65.8 million.)

While that company’s data for its MyoCell has been rather shaky and its primary patent on MyoCell is set to expire in 2009 — accounting perhaps for the lack of interest in the company — some other promising IPOs have been postponed.

BG Medicine (Waltham, Massachusetts), a diagnostics company, last month (MDD, Jan. 25, 2008) decided not to proceed with its IPO, based on “current market conditions.” The company withdrew its SEC filing in December.

Transoma Medical (St. Paul, Minnesota) also this month postponed its offering, which had been valued at up to $54 million for 4 million shares (MDD, Feb. 5, 2008).

Transoma makes implantable, subcutaneous, wireless diagnostic and monitoring products.

The market has not been all gloom and doom, however. IPC The Hospitalist Company (North Hollywood, California), a provider of hospitalist services, reported closing an offering earlier this month of 5.2 million shares, and that the underwriters exercised their over-allotment option, buying 705,000 additional shares of common stock at $16 a share (MDD, Feb. 7, 2008).

Including the over-allotment, IPC and selling stockholders sold somewhat more than 5.9 million shares in the offering, for net proceeds of $84.5 million after expenses. Excluding shares offered by selling stockholders, the company raised about $45.8 million in net proceeds.

Several companies, showing optimism that the markets will rebound, recently have filed IPOs.

In January, Cardiovascular Systems (St. Paul, Minnesota) filed a registration statement on with the SEC for a proposed IPO of up to $86.25 million of its common stock (MDD, Jan. 24, 2008). The company’s initial and only product is the Diamondback 360 Orbital Atherectomy System, which it describes as a minimally invasive catheter system for the treatment of peripheral arterial disease.

The following day, Accuro Healthcare Solutions (AHS; Dallas) filed a registration statement for a proposed offering of up to $143.75 million in proceeds (MDD, Jan. 25, 2008). AHS is a provider of internet-based solutions to a range of healthcare providers, including hospitals and ancillary healthcare providers, designed to enable them to more effectively manage the complexities of the patient registration, billing, collection and reimbursement process.

Earlier that month, Alma Lasers (Caesarea, Israel), a maker of non-invasive energy-based aesthetic systems, reported filing for an $86 million IPO and the intention to be traded on the Nasdaq Global Market under the symbol ALMA (MDD, Jan. 4, 2008).

Mako, the latest company to brave the icy IPO waters, has developed a robotic solution and implants for minimally invasive orthopedic knee procedures. Its Haptic guidance system includes an interactive haptic robotics platform that utilizes tactile-guided robotics and patient-specific visualization to prepare the knee joint for the insertion and alignment of resurfacing implants through a keyhole incision. The FDA-cleared surgeon-interactive haptic robotic system allows surgeons to provide a tissue-sparing bone resurfacing therapy that the company calls MAKOplasty.

Mako said it intend to use about $18 million to $24 million of expected proceed for sales and marketing expansion. It expects to use $16 million to $22 million for the continuation of R&D activities.

In addition, the company said it intends to use a portion of the net proceeds to pay $4 million to IBM (Armonk, New York), as required by the IPO under the terms of a licensing agreement with IBM. It may also use a portion of the proceeds for acquisitions.

In its filing, the company noted that it has sustained net losses in every year since its inception in 2004, including a net loss of $10.6 million for the year ended Dec. 31, 2006, and a net loss of $7.5 million for the six months ended June 30. As of Dec. 31, 2006, and June 30, 2007, the company had an accumulated deficit of $19.4 million and $28.4 million, respectively.

The company said it intends to apply to have its common stock approved for quotation on the Nasdaq Global Market under the symbol MAKO.