A Medical Device Daily
EnteroMedics (St. Paul, Minnesota) reported the estimated pricing range and number of shares for its international public offering first disclosed in May (Medical Device Daily, May 30, 2007). The company is offering 5 million shares of its common stock at a range of between $14 and $16 a share.
The company said it has granted the underwriters the right to purchase up to another 750,000 shares of common stock to cover any over-allotments.
The company could raise up to $92 million before expenses if all the over-allotments are exercised at the high end of the IPO share offering estimate.
Founded by CEO Mark Knudson in 2002, EnteroMedics is a development-stage medical device company focused on the development of devices that use neuroblocking technology to treat obesity and other gastrointestinal disorders. Its strategy is to “turn off” hunger pangs.
Working with the Mayo Foundation (MDD, March 31, 2005), the company has developed the Maestro system, a pacemaker-like device that when applied to the vagus nerve (which connects the brain with the stomach, pancreas, and esophagus), is designed to provide the feeling of fullness with smaller portions of food.
The Maestro system, the company’s initial product, uses what it calls Vagal Blocking for Obesity Control (VBLOC), involving the delivery of high-frequency, low-energy electrical impulses.
The Maestro includes two small electrodes that are laparoscopically implanted and placed in contact with the trunks of the vagus nerve just above the junction between the esophagus and the stomach, near the diaphragm. The electrodes receive electrical impulses from a neuroregulator implanted under the skin in the abdominal region.
The major components of the Maestro system include: a neuroregulator that emits electrical pulses through the lead system; a lead system that delivers the pulses to the vagus nerve; a controller that regulates the rate and intensity of the pulses; and transmit coil that delivers RF energy and therapy control information across the skin into the neuroregulator; and a clinician programmer.
The company said it will use about $23 million of the proceeds for achieving regulatory approval of the Maestro system; about $20 million for initiating sales and marketing efforts; about $13 million for R&D activities; and the remainder for working capital and other general corporate purposes.
Since its launch in 2002, the company has reported a net loss of $40.2 million. In July 2006, the company closed on a $46 million round of venture financing (MDD, July 20, 2006).
The company’s common stock has been approved for quotation on the Nasdaq Global Market under the symbol ETRM.
J.P. Morgan Securities and Morgan Stanley & Co. are acting as joint book-running managers of the offering, with Cowen and Co. acting as co-lead and Leerink Swann & Co. acting as co-manager for the offering.
Reliant Technologies, (Mountain View, California) also reported its estimated IPO share price range and the number of shares it planned to sell from its previously reported offering (MDD, Aug. 17, 2007). In an SEC filing, the company said it plans to offer 4.7 million shares at $14 to $16 each.
The company also said it plans to offer its underwriters a 30-day option to purchase up to 705,000 additional shares of common stock to cover over-allotments.
If the shares sell at the high end of the estimate and all the over-allotments are exercised, the company could raise up to $86.48 million before expenses.
Reliant, , develops non-surgical therapies for the treatment of various skin conditions under the Fraxel brand.
The company said it plans to use about $20 million of the proceeds for sales and marketing initiatives to support the commercialization of its existing and any future products; and $10 million to support its R&D activities, clinical trials and obtaining necessary regulatory approvals.
Reliant said it intends to use the remainder of the net proceeds from this offering for capital expenditures, working capital and general corporate purposes. It said it plans to list its common stock on the Nasdaq Global Market under the symbol RLNT.
The underwriters for the offering will be Piper Jaffray & Co. and Banc of America Securities, acting as joint book-running managers, and Jefferies & Co. and RBC Capital Markets acting as co-managers.