High-flow oxygen company Vapotherm inhales $56M in IPO

Respiratory care specialist Vapotherm raised $56 million in an initial public offering of 4 million shares, priced at the low end of the range at $14. The Exeter, New Hampshire-based company plans to list on the New York Stock Exchange under the ticker symbol VAPO.

Vapotherm’s products deliver mask-free, high-flow oxygen support to hospital patients in respiratory distress, using nasal cannulae at volumes up to 8 L/m in infants or 40 L/m in adults, as an alternative to other pressure-based ventilation devices.

The company estimated that more than 1.5 million patients have been treated with its Precision Flow systems, via more than 12,000 installed units, according to its preliminary prospectus filed with the SEC.

Vapotherm posted $35.6 million in revenue for 2017, as well as $30.7 million for the first nine months of this year, with about two-thirds coming from sales of single-use, disposable nasal cannulae. At the same times, it incurred net losses of $31.0 million and $29.6 million, respectively.

It also granted its underwriters a 30-day option to purchase as many as 600,000 additional shares at the IPO price minus discounts and commissions. Since being founded in 1999, Vapotherm has raised more than $200 million in venture capital funding across 11 rounds—including most recently $10 million this past September—according to data from Crunchbase.

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The FDA recently granted Vapotherm’s de novo request to expand the indication of an updated version of its Precision Flow systems currently under development, according to the company.

The agency also created a new classification regulation, identifying its device as a high-velocity nasal insufflation device that augments breathing in a hospital setting—which Vapotherm believes will make its device an attractive alternative to the current standard of care, noninvasive positive pressure ventilation (NiPPV) masks.

“We are delighted with the grant of this new product code by the FDA. We believe it clarifies the appropriate clinical use of Hi-VNI Technology and informs clinicians that it is safe to use as a tool to treat undifferentiated respiratory distress,” said Michael McQueen, VP of medical education at Vapotherm. “It emphasizes that Hi-VNI Technology has a similar clinical application of ventilatory support to the standard of care of NiPPV, but without the tight-fitting mask.”