Minimally invasive sinus company Entellus Medical ($ENTL) hit the IPO trifecta in the first med tech IPO of the year. It priced at $17, at the top of its proposed range, and increased the number of shares sold to 4.6 million from 4.4 million to raise $78 million. Then it was up 23% in early trading on Jan. 29 to about $21. All this in a market that's still roiling from the Federal Reserve reiterating that it could start raising short-term interest rates in June.
The maker of implants for aging eyes, Presbia ($LENS), didn't fair nearly as well. But it got the deal done. It priced at $10 a share, below its $11 to $13 range, and sold 4.2 million shares. In early trading, it was off 12% to about $8.75.
|Top: ExprESS LoProfile Multi-Sinus Dilation Tool with PathAssist LED Light Fiber. Bottom: XprESS Multi-Sinus Dilation Tool--Courtesy of Entellus|
Entellus hopes to convince physicians to use its FDA-cleared balloon sinus dilation products, including the XprESS Multi-Sinus Dilation devices and PathAssist tools, for routine physician office treatment of patients who have failed to effectively manage their chronic sinusitis using therapeutics.
Balloon sinus dilation isn't new, but Entellus expects that the strength of its tools in addition to a growing body of clinical evidence will convince physicians to use it in the office as well as for payers to reimburse for it. Reimbursement codes for in-office standalone balloon sinus dilation went into effect in 2011, according to the company.
Balloon dilation currently is used as part of a part of a surgical procedure, but standalone, in-office use isn't particularly common.
According to a multicenter, randomized, controlled trial, Entellus has found standalone balloon sinus dilation with its product to be as effective as endoscopic sinus surgery, the company said in an SEC filing. The company said that 76% of U.S. health insurance payer lives, including Medicare and Medicaid, cover standalone sinus dilation in a physician's office.
More than 75,000 patients have been treated with its XprESS products since one first launched in February 2010. During the first 9 months of 2014, Entellus had revenue of $34.4 million with a net loss of $5.7 million. It had a gross margin of 28% during that period. Entellus has lost a total of $102.6 million since its 2006 inception.
In a show of support, existing Entellus shareholders agreed to buy up to $19 million of the IPO. Its investors include Essex Woodlands (26% pre-IPO stake), SV Life Sciences (23.9%), Split Rock Partners (21.1%) and Covidien Ventures (7.2%).
The company's ear, nose and throat focused med tech peer, Intersect ENT ($XENT) is up 65% since its IPO last July and now has a market capitalization exceeding $500 million. In a gesture supporting investor optimism, Entellus chairman and CEO Brian Farley will ring the closing bell on NASDAQ for Jan. 29.
Up next this week, catheter-based cardiovascular companies Avinger and Infraredx are expected to test their luck on the public markets.
- here are the Entellus and Presbia releases