A Medical Device Daily
Medical device manufacturers ev3 (Plymouth, Minnesota) and Micrus Endovascular (Sunnyvale, California) both launched their initial public offerings (IPOs) this week, while HemoSense (San Jose, California) opted to postpone its IPO.
ev3 raised about $165 million with underwriter Piper Jaffray. Warburg Pincus owns about 92% of the company.
ev3 priced 11.8 million shares at $14, below the estimated $16-$18 range. The stock opened at $13.50 and climbed to $14 in recent trades.
ev3 and one of its stockholders also have granted to the underwriters a 30-day option to purchase up to another 1,764,750 shares of common stock at the IPO price to cover over-allotments.
The IPO was first unveiled in April.
ev3 has been acquiring and developing a variety of catheter-based technologies used in the treatment of coronary, neurological and peripheral vascular diseases. Its cardiovascular products include the SpideRx, the X-Sizer, the Diver C.E. and the PLAATO. It also is developing a variety of stents used in the peripheral vasculature: a family of Prot g devices and a family of balloon angioplasty catheters.
In its IPO, Micrus offered 3.25 million shares. It opened at $11.06, above its $11 offering price and raised $36 million with net proceeds expected to be nearly $31 million. Underwriters are A.G. Edwards and Needham & Co. The stock traded at $11.01 in recent action.
The company also granted to the underwriters the option to sell an additional 487,500 shares of the stock at the IPO price to cover over-allotments.
The stock began trading yesterday on the Nasdaq under the symbol MEND.
The company – which manufactures implantable and disposable medical devices used in the treatment of cerebral aneurysms – filed for the IPO in March.
A.G. Edwards & Sons is acting as book-running manager and, together with Needham & Co., is acting as representative of the underwriters.
HemoSense chose to postpone its IPO of 2.6 million shares at the range of $9 to $13, according to Thomson Financial.
The company filed for the offering in April and then in June dropped the IPO price range to $8 to $10 a share, down from $9 to $13, but boosted the number of shares from 2.6 million to 3.5 million. At the time, the expectation was to raise $40.3 million.
HemoSense manufactures hand-held blood coagulation monitoring system.
In other financing news:
• Langer (Deer Park, New York) reported the closing of its previously disclosed public offering of 5 million shares of common stock at $6.50 a share. The offering resulted in net proceeds of about $30.2 million. The company said it intends to use the net proceeds to repay debt incurred in connection with the acquisition of Silipos (Niagra Falls, New York) and for working capital and other general corporate purposes, including possible acquisitions.
Piper Jaffray & Co. acted as lead managing underwriter of the offering. Ryan Beck & Co. and Wm Smith Securities acted as co-managers.
Langer, together with Silipos, is a provider of medical products targeting the orthopedic, orthotic and prosthetic markets. In addition, the company offers a line of skincare products for the medical and therapeutic markets. The company sells its products primarily in the U.S. and Canada as well as in more than 30 other countries.
• Arrowhead Research (Pasadena, California) reported that almost all of its outstanding redeemable warrants to purchase common stock were exercised prior to the exercise deadline of 4 p.m., PT, on June 14. The company said that the net proceeds of more than $20 million will be used to fund its subsidiaries, its research projects and general working capital purposes.
“We continually see exciting opportunities in nanotechnology. Having a strong cash position will allow us to act quickly when the right opportunities are identified,” said R. Bruce Stewart, president of Arrowhead. “The proceeds from the warrant call will allow Arrowhead to continue to fund existing companies, to expand our research programs, and to continue implementing our overall business plan.”
Arrowhead Research is a diversified nanotechnology company structured to commercialize products expected to have revolutionary impacts on a variety of industries, including materials, electronics, life sciences, and energy.
There are three strategic components to Arrowhead’s business model:
— Outsourced R&D: Arrowhead identifies patented or patent-pending technologies at universities or government labs and funds additional development of those technologies in exchange for exclusive rights to commercialize the resulting prototypes. Leveraging the resources and infrastructure of these institutions provides Arrowhead with a highly cost-effective development pipeline. Currently, Arrowhead is supporting efforts in stem cell technology, nanomaterials, nanoelectronics, and nanobiotools at the California Institute of Technology and Stanford University.
— Commercialization Program: After prototypes have been sufficiently developed in the laboratories, Arrowhead forms or acquires majority-owned subsidiaries to commercialize the technology and provides the subsidiaries with strategic, managerial, and operational support. At present, Arrowhead owns majority interest in subsidiaries commercializing diverse technologies, including anti-cancer drugs, RNAi therapeutics, and compound semiconductor materials.
— The Patent Toolbox: Arrowhead has acquired or exclusively licensed patents and patent applications covering a broad range of nanotechnology. The company is actively seeking to add to this intellectual property portfolio.
• Mylan Laboratories (Pittsburgh) reported the commencement of its modified Dutch Auction self-tender offer for up to 48.8 million shares (valued up to $1 billion) of its common stock. The tender offer will expire at 5 p.m., EDT, on July 15, 2005, unless extended.
In the offer, shareholders will have the opportunity to tender some or all of their shares at a price not less than $18 a share or more than $20.50 a share.
Mylan has three principal subsidiaries, Mylan Pharmaceuticals, Mylan Technologies and UDL Laboratories, that manufacture generic and proprietary products.
• Genentech (South San Francisco, California) reported a board authorization extending its stock repurchase program for another $2 billion of its common stock for a total of $4 billion through June 30, 2006. The board also amended the current program to increase the number of shares that can be repurchased from 50 million to 80 million shares.
As of May 31, 2005, Genentech has purchased about 29 million shares of its common stock under the repurchase program at a cost of around $1.5 billion. The board initially approved $1 billion for repurchases in December 2003 and extended the program by another $1 billion in September 2004.
Genentech said it will use the repurchased stock to offset dilution caused by the issuance of shares related to its employee stock plans. It said there are no other plans for the shares which may be purchased under the program.
As of May 31, 2005, Genentech had 1,060,571,800 shares of common stock outstanding.
Genentech is a biotech firm that manufactures biotherapeutics.
• Rotech Healthcare (Orlando, Florida) reported obtaining a waiver of any defaults and events of default that have arisen under its credit agreement due to its delay in delivering its unaudited financial statements for the quarter ended March 31, 2005, and an appraisal of certain assets. Rotech delayed filing of its Form 10-Q for the quarter ended March 31, 2005, due to, it said, “the pending restatement of certain of the company’s previously issued financial statements.” The delay beyond the 30-day cure period provided under the credit agreement would have resulted in a default, but it said lenders have agreed to waive the defaults. Under waiver terms, the company has until July 15 to make the filing. The delay also resulted in a technical default under the company’s indenture, but that default is subject to a cure period under the indenture through July 15.
Rotech is a provider – in 48 states through about 475 operating centers – of home respiratory care and durable medical equipment and services.