Movano Inc. closed its IPO on the Nasdaq Friday, reeling in gross proceeds of $48.9 million. The Pleasanton, Calif.-based startup launched the offering of 8.5 million shares of common stock priced at $5 per share on March 22, with a target of raising $42.5 million. The final tally included the fully exercised over-allotment option by underwriters to purchase an additional 1,275,000 shares.
Founded in 2018, Movano raised $27 million in financing prior to this week’s IPO. Movano shares (NASDAQ:MOVE) hit a high of $7.26 on their opening day of trading on the Nasdaq Capital Market, before closing at $6.60. The company ended the week at $5.64.
The IPO will support the continued development of Movano’s glucose and blood pressure monitoring technology. The company’s first product, a continuous glucose monitor (CGM) that also measures blood pressure and heart rate, uses radiofrequency (RF) technology to monitor glucose levels via a noninvasive, external wearable. Comprised of ultra-wideband RF technology, machine learning and the cloud, the CGM is likely to resemble a watch or wrist-worn fitness wearable and be at least as accurate as existing CGMs, but with a lower price point.
Med-tech veteran named CEO
Coinciding with the IPO, Movano named current director John Mastrototaro as CEO, effective April 1. He will replace founder and current CEO Michael Leabman, who will assume the role of chief technology officer and remain on the board.
Before joining Movano, Mastrototaro was chief operating officer of digital knee replacement developer Orthosensor Inc., which was acquired by Stryker Corp. in January. Prior to that, he spent 25 years with Minimed and Medtronic plc, where he spearheaded advancements in diabetes management, including the ambulatory CGM system, sensor augmented insulin pump and early iterations of the artificial pancreas.
“John’s experience building and growing market-leading medical devices and extensive knowledge of how to work with the FDA will help the company successfully commercialize its products, carving a path to develop a variety of devices that suit specialized medical needs, generate significant consumer appeal and improve outcomes,” Leabman said.
The IPO is expected to generate net proceeds of approximately $38.6 million. Of that amount, 25 million is earmarked for product development, with the balance to be used for working capital and general corporate purposes.
According to a prospectus filed with the SEC, the company believes the net proceeds “will be sufficient to fund development and internal and external testing of our planned wearable product to the point where we are able to generate data that will enable us to submit to the FDA the 510(k) clearance application.”
Movano plans to validate its technology against catheter-based blood draw testing – required for FDA clearance – in about 20 to 30 patients. That will be followed by a pivotal trial. The company did not provide a time frame for regulatory approval.
In September, Movano announced a collaboration with Globalfoundries Inc. (GF) to advance commercialization of its CGM wearable, whose RF sensor platform leverages GF’s 22Fdx 22nm FD-SOI (fully depleted silicon-on-insulator) solution. The novel approach enables high performance and small form-factor, low-power sensors that can be cost-effectively manufactured at scale.
Current CGMs are accurate within a plus or minus range of roughly 9% to 10% range. However, the existing devices, which typically need to be replaced every week or two weeks, can wind up costing several thousand dollars a year. Movano aims to offer a comparable level of accuracy, but at a more affordable price.
“We really want to make this as cost-effective as buying a low-cost fitness band and having a small monthly recurring charge just like you do for apps you may have on your phone,” Leabman told BioWorld in an earlier interview. That would allow Movano to serve not just type 1 and type 2 diabetes, but people with prediabetes and the broader wellness market, he said.
Abbott Laboratories, Dexcom Inc., Medtronic and Senseonics Inc. are the biggest CGM players. Last fall, Abbott scored another win with its CGM technology, snagging the CE mark for its next-generation Freestyle Libre 3 system. The newest member of the Libre franchise delivers continuous, real-time glucose readings automatically to smartphones every minute.
In November, Dublin-based Medtronic plc launched the Inpen integrated with real-time Guardian Connect CGM data. The first FDA-cleared smart insulin pen for people on multiple daily injections, it gives users real-time glucose readings alongside insulin dose information so that they can manage their diabetes in one view.