|CoSense hemolysis test--Courtesy of Capnia|
Testing newborns to determine who are most at risk from jaundice is no easy task at present--often requiring repeated heel sticks to monitor bilirubin levels as they change during the first weeks of life. Capnia expects to launch its breath-based device that would make the determination of whether newborn jaundice is a health threat easier and faster. This could potentially cut down the need for infant hospital readmissions due to jaundice.
Capnia expects to use the IPO funds to launch its CoSense hemolysis test by year-end in the U.S. and early next year in the EU; it's already approved in both regions. CoSense detects hemolysis by measuring carbon monoxide in the end-tidal component of the breath (ETCO). The IPO is slated to go out during the week of Aug. 4.
The company said its product is the only one approved to enable physicians to meet 2004 American Academy of Pediatrics guidelines that require ETCO measurement "to assess the presence of hemolysis in neonates requiring phototherapy, neonates unresponsive to phototherapy or readmitted for phototherapy and neonates with bilirubin levels approaching transfusion levels."
When severe jaundice occurs in the presence of hemolysis in newborns, rapid diagnosis and treatment must occur to avoid neurological impairment or other disability.
The company plans to build up a small sales force of 12 to 16 people in order to target the largest hospital birth centers. There are about 100 U.S. centers with over 5,000 births annually; they account for 16% of all U.S. births. A second tier of around 300 hospitals in the U.S. each has 2,500 or more births annually, totaling 25% of U.S. births. These will be the primary initial targets for the sales team. In the EU, it expects to partner with regional distributors.
Capnia expects to price CoSense at less than $5,000 to avoid capital spending scrutiny by hospitals. About 60% of term births and 80% of preterm births result in infants who are jaundiced and may be candidates for the test.
The company expects that its Sensalyze Technology Platform could also be applied to nitric oxide assessment in diagnosing asthma in children younger than 7 years; end-tidal carbon dioxide neonatal measurement; and hydrogen breath testing for infants with colic.
Existing investors include Vivo Ventures (39.8% pre-IPO stake), Teknoinvest (14.44%) and Asset Management Partners (6.48%). Pre-IPO, the company has raised about $50 million in three equity rounds. Existing shareholders have committed to buying up to $5 million of the IPO. The offering intends to sell 2.7 million units at a price range of $6.50 to $8.50 each. At the midpoint, this would raise $20 million.