Medical Device Daily Contributing Writer
Monitoring product maker Masimo (Irvine, California) has filed a registration statement with the Securities and Exchange Commission for an initial public offering of up to $150 million.
Piper Jaffray & Co. and Deutsche Bank Securities are acting as joint book running managers for this offering and, together with Cowen and Company, and Thomas Weisel Partners, are acting as representatives of the underwriters.
The company, whose shares are slated to trade on the NASDAQ Global Market under the symbol MASI, has also granted the underwriters a 30-day option to acquire a yet to be determined amount of shares to cover over-allotments.
The company said it intends to use about $15 million to $20 million of the net proceeds from this offering in capital expenditures and deferred cost of sales, primarily representing the placement of equipment under long-term sensor purchase contracts, and about $7.5 million in miscellaneous capital purchases. It said that the remainder of the proceeds will be used for ongoing research and development, sales and marketing activities and increased costs associated with becoming a public company.
Masimo said it believes that the net proceeds from this offering, together with its cash and cash equivalent balances will be sufficient to meet our anticipated cash requirements for at least a year.
The company said in its filing that it believes its success depends, in significant part, on obtaining patent protection for its products and technology.
In 2005, the company settled a six-year lawsuit against Nellcor (Pleasanton, California), in which it claimed that Nellcor was infringing certain of its pulse oximetry signal processing patents. Nellcor paid Masimo $265 million for damages as well as an advance royalty payment of $65 million (Medical Device Daily, Jan. 25, 2006).
The company invented Masimo Signal Extraction Technology, or Masimo SET, which provides the capabilities of read-through motion and low perfusion pulse oximetry to address the primary limitations of conventional pulse oximetry. Pulse oximetry is the non-invasive measurement of the oxygen saturation level of arterial blood, or the blood that delivers oxygen to the body's tissues, and pulse rate.
Masimo estimated that the worldwide pulse oximetry market is more than $900 million, the largest component of which is the sale of consumables.
The company said it has incurred net losses attributable to common stockholders in each year from its inception through 2004. Its net losses attributable to common stockholders were about $8.6 million, $15.4 million and $12.3 million in 2002, 2003 and 2004, respectively.
Reliant Technologies (Mountain View, California) reported that it has closed a $15 million Series E round of funding led by new investor Delphi Ventures.
Delphi joined with Three Arch Partners and Meritech Capital Partners, earlier venture partners, and other early round individual investors in completing this offering.
"We are very pleased to have completed this E round of funding. It is a significant endorsement of our Fraxel technology and our pursuit of growth opportunities in the rapidly evolving field of aesthetic laser medicine and surgery," said Eric Stang, president/CEO of Reliant. "These additional funds will enable us to aggressively build our marketing, clinical education and distribution infrastructure worldwide, support our ongoing technology developments and broaden Reliant's role as a market leader."
Reliant develops clinical solutions to repair and rejuvenate aging and environmentally damaged skin. Its Fraxel lasers are used primarily by aesthetic physicians to treat periorbital wrinkles, pigmented lesions, acne scars and surgical scars.
In other financing news:
• Spirus Medical (Stoughton, Massachusetts), a developer of diagnostic and therapeutic advancement systems for gastroenterology, urology and gynecology, reported that it has raised $8.5 million in a Series B convertible preferred stock financing.
BioVentures Investors, Point Judith Capital and Village Ventures, along with a group of accredited individual investors, participated in the financing.
"This financing will allow us to continue to commercialize our innovative EAS platform technology for a growing array of applications," said Steve Tallarida, Spirus Medical president and chairman.
Spirus Medical has developed the Endoluminal Advancement System (EAS) that uses a soft spiral component, fixed on an active, flexible overtube to facilitate a more efficient approach to endoscopy.
In November 2006, the company launched its first two products for colonoscopy; the Endo-Ease Advantage and the longer Endo-Ease Vista.
The company also has received 510(k) clearance for its EndoEase Discovery SB product for enteroscopy and will launch that product later this year.
Spirus was incubated and founded in 2005 by STD Med (Stoughton, Massachusetts), a developer of medical technologies.
• Coherex Medical (Salt Lake City) said it has completed an equity financing of $8.525 million through the sale of Series A convertible preferred stock.
The proceeds of the transaction are expected to support clinical studies, continued research and development related to the company's Coherex FlatStent Patent Foramen Ovale (PFO) closure system and for general corporate purposes.
A PFO is a common heart defect and is an abnormal opening between the upper chambers of the heart. This opening may allow blood to bypass the lungs by shunting from the right side of the heart to the left. The existence of a PFO can lead to stroke and may be the cause of migraine headaches in certain patients.
The lead investors in this round of financing were Oxford Bioscience and vSpring Capital.
In connection with the financing, the company named Jeff Barnes, general partner of Oxford Bioscience and Dinesh Patel, PhD, managing director of vSpring Capital to the board of directors.
• St. Jude Medical (St. Paul, Minnesota) reported its intention to offer $1 billion in aggregate principal amount of convertible senior debentures due December 2008 in a private offering to qualified institutional buyers.
The company said it also intends to grant the initial purchaser an option to purchase up to $200 million aggregate principal amount of additional debentures to cover any over-allotments.
St. Jude said it intends to use a portion of the net proceeds of the offering to repay indebtedness under its current interim liquidity facility and commercial paper program used to finance the previously disclosed $700 million of share repurchases which were completed in February.
Additionally, the company said it intends to use a portion of the net proceeds of the offering to repurchase about $300 million of its common stock through private block trades, completed simultaneously with the closing of the sale of the debentures, and through subsequent purchases in the open market
It will also use a portion of the net proceeds to fund the cost of a convertible note hedge transaction that it expects to enter into with the initial purchaser of the debentures or its affiliates in connection with the offering.