Insulin pump maker Tandem craves $123M in upsized IPO

Tandem relies on its t:slim insulin pump for 93% of its revenue.--Courtesy of Tandem

While this year's IPO boom has largely left medical device companies out in the cold, insulin pump innovator Tandem Diabetes Care remains bullish, raising its target to $123.2 million.

Tandem is angling for nearly 25% more cash from its Wall Street debut, planning to offer as many as 8.2 million shares at up to $15 apiece. The company figures it'll spend about $40 million of its haul on a scale-up in marketing infrastructure, looking to expand the adoption of its FDA-cleared t:slim, a tiny touchscreen insulin pump. About $20 million of its raise would go toward manufacturing, while about $12 million would fund its R&D efforts, according to an amended S-1.

In the pipeline is t:flex, a pump with a larger insulin capacity, and t:sensor, which pairs Tandem's slim technology with continuous glucose monitoring. The company has also partnered with the Juvenile Diabetes Research Foundation to develop t:dual, a two-chamber device that can deliver multiple hormones.

Like many of the life sciences outfits looking to go public this year, San Diego-based Tandem has yet to turn a profit, posting a $26.5 million loss in the first half and saying it will be a few years before it can work its way into the black. The company reported about $11 million in revenue over the same period, with t:slim accounting for about 93% of sales.

As of last week, 40 drug and diagnostic developers have gone public in 2013, riding a wave of investor confidence that has put more than $3 billion into the pockets of life sciences companies. However, thanks to a tepid industrywide M&A climate and the high cost of development, medical device companies have been slower to take part in the IPO boom. But, while Tandem is just the second devicemaker to hand in an S-1 this year, the first, orthopedics outfit LDR, had an encouraging debut, hauling an overallotted $75 million and trading about 33% above its initial share price.

- read the S-1

Special Reports: Are medical device companies invited to the biotech IPO party?

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