Shortly after its shareholder lock-up expired on May 5, Nevro ($NVRO) has gone on to conduct a whopping $240 million stock sale. Of that, $150 million went to its selling shareholders, with Johnson & Johnson Development Corporation (JJDC) and Novo A/S leading the way.
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| Senza spinal cord stimulation system--Screenshot courtesy of Nevro |
The remaining $90 million is going to the company to help it launch its Senza spinal cord stimulation system to treat chronic pain. The FDA approved the Senza SCS system on May 8 and then Nevro disclosed the first U.S. commercial use of Senza on May 22.
The offering sold 2.9 million shares from selling investors and 1.8 million for the company at a $51 share price. The financing was upsized from the $200 million initial size proposed on June 1 that included $125 million for selling shareholders and $75 million for the company. And, unlike the typical investor punishment for further dilution, the company share price has remained fairly stable.
Nevro has been a huge winner for investors. Its shares are up about one-third so far this year to more than $51--that's almost triple the $18 IPO share price. Investors in the final Nevro venture financing, a 2013 Series C round, paid a mere $11.11 per share, according to a recent SEC filing.
In the documentation for the originally proposed $125 million for selling shareholders, the largest ones were expected to be JJDC ($38.6 million), Novo ($25.6 million), Bay City Capital ($25.1 million), Three Arch Partners ($20.1 million) and NEA ($16.1 million). All of these shareholders will continue to hold substantial stakes in the $1.3 billion company after the sale, even with the upsized offering. The company disclosed a total of only about $80 million in venture capital investment in various SEC filings.
To sustain all the momentum Nevro has had in the last roughly 6 months, the company is going to have to execute perfectly on its Senza U.S. launch, which it will conduct via its own internal sales force. On its mid-May earnings call, the company said it had a 52-person sales force that it expects to continue to expand over the next year-and-a-half to two years. At March 31, Senza had only a total of $92 million in sales in Europe and Australia.
- here are the release and SEC filing
Special Report: FierceMedicalDevices' 2012 Fierce 15 - Nevro