Profitable neuro, vascular device player Penumbra files for up to $115M IPO

ACE64--Courtesy of Penumbra

Penumbra hopes to reinvigorate a medical device IPO market that's been taking time off since late June. It seems to stand a good chance to do so--with a stellar major shareholder, a pair of bulge bracket banks and years of profitability behind it.

In May, the company garnered an FDA clearance for its ACE64 aspiration thrombectomy system for the revascularization of large vessel occlusions in patients with acute ischemic stroke. The removal of clots involved in stroke, in combination with medication, is rapidly becoming standard-of-care in the U.S.

The company had $81.3 million in revenue during the first half of this year, up from $57.6 million during the same period in 2014. The bulk of that revenue, or $66.1 million, came from its neuro products, with the peripheral vascular ones accounting for the remaining $15.2 million.

Penumbra noted in its IPO prospectus that it has been profitable on an annual basis since 2009, with the exception of 2013, but it cautioned that it is not cash-flow positive. At June 30, the company had $91.3 million in working capital. Penumbra already had 1,000 employees at June 30, a figure that has roughly doubled since the end of 2013.

Its marketed products include several neurovascular access products, the ACE system, neurovascular embolization products, a neurosurgical tool as well as peripheral embolization and thrombectomy devices.

In late July, Penumbra disclosed clinical data for its ACE64 thrombectomy system showing that of 117 treated acute ischemic stroke patients with large vessel occlusions, 96% achieved high revascularization rates, while 62% had complete revascularization.

"In Europe, my colleagues and I have long used many different variations of stent retrievers," said study investigator Dr. Werner Weber in a statement as the time. He is the director of the Institute for Diagnostic and Interventional Radiology, Neuroradiology and Nuclear Medicine at the University Hospital Knappschaftskrankenhaus in Bochum, Germany.

He continued, "ACE64 offers improvements over earlier technology by quickly removing clot en masse, often in a single attempt, to increase TICI 3 [Thrombolysis in Cerebral Infarction], reduce procedure time and minimize the need for adjunctive devices. Working proximal to the occlusion, ACE64 also decreases clot disruption to create a favorable safety profile."

Fidelity Investments holds 11.6% of Penumbra pre-IPO, with its officers and directors holding almost one-quarter of the company between them. J.P. Morgan and BofA Merrill Lynch are the lead underwriters on the deal.

- here is the IPO prospectus