A no-brainer: CVRx plots $92M IPO for its neurostim implant for heart failure

Money piles cash
The Barostim Neo system sends electrical pulses to blood pressure receptors in the wall of the carotid artery, stimulating the brain’s natural processes of balancing out the nervous system and mitigating the symptoms of heart failure. (Pixabay)

With a first-of-its-kind FDA approval under its belt, CVRx’s next move is a no-brainer: The neurostimulation device maker has filed for an initial public offering that could rake in up to $105.5 million.

CVRx's Barostim Neo system is an implanted device that sends out electrical pulses that essentially trick the brain into regulating imbalances in the nervous system, ultimately acting as a treatment for heart failure.

Nearly two years after receiving the FDA’s blessing for the implant—and two decades after its founding—CVRx has set its sights on becoming a publicly traded company. According to SEC filings, the 2021 Fierce 15 winner plans to offer 6.25 million shares of common stock priced between $15 and $17 per share.

The company expects to rake in about $91.5 million in the offering, based on the midpoint price of $16 per share. Those net proceeds could jump as high as $105.5 million, however, if the transaction’s underwriters choose to buy an additional 937,500 shares that CVRx will make available for up to 30 days after the IPO.

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CVRx said it will use its earnings from the transaction to expand its sales team and support the commercialization of Barostim Neo. It will also fund further research and development efforts to apply its technology to other indications.

After the offering is complete, the company will be listed on the Nasdaq under the ticker symbol CVRX.

As a private company, CVRx raised nearly $400 million in venture funding. Just last July, for example, it brought in $50 million in equity financing led by Strategic Healthcare Investment Partners and Vensana Capital. Prior to that, it closed a $113 million series G round led by Johnson & Johnson Innovation.

CVRx Barostim
The Barostim Neo device (CVRx)

J&J’s venture arm has deepened its relationship with CVRx over the years, with a current company stake of approximately 32%, according to MarketWatch. After the IPO, J&J will retain ownership of at least 20% of the newly public company.

RELATED: CVRx's brain-stim implant approved to treat heart failure

The Barostim Neo system is implanted under the collarbone, with leads attaching to the neck’s carotid artery. When activated, the device emits electrical pulses to baroreceptors in the artery, which the brain receives as an indication that it needs more oxygen. To combat this, it dilates the arteries and slows down the heart rate, therefore counteracting the symptoms of heart failure.

The device was approved by the FDA in August 2019 to treat patients experiencing symptoms of advanced heart failure with reduced ejection fraction who aren’t responding to other forms of therapy. It had previously received the agency’s breakthrough device designation in 2015, granting it an accelerated pathway through the regulatory approval process.

Meanwhile, in Europe, the Barostim Neo device has been cleared not only to lessen the symptoms of heart failure but also to treat hypertension. CEO Nadim Yared told Fierce Medtech earlier this year that CVRx could potentially pursue FDA clearance for that indication, and for use in treating other forms of heart failure.