Lucid Diagnostics prepares to leave the PAVmed nest with $57M IPO filing

Months after PAVmed outlined its intent to spin off subsidiary Lucid Diagnostics into a standalone public company, the esophageal cancer test-maker’s path forward has become clear.

Lucid filed with the SEC this week for an initial public offering valued at up to $57.5 million. The company didn’t disclose the terms of the IPO, including how many shares it’ll offer up, their pricing parameters nor the date they’ll be made available.

At that time—whenever it may be—Lucid will be listed on the Nasdaq with the ticker symbol “LUCD.”

PAVmed, which currently owns nearly 74% of its subsidiary’s outstanding common stock, will remain Lucid’s controlling stockholder after the public offering, according to the S-1 filing, though it didn’t disclose the exact percentage of the company’s combined voting power that PAVmed will retain.

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The IPO plans come not long after Lucid racked up another pair of regulatory clearances for its diagnostic testing system. In May, it received a CE mark for the EsoCheck cell collection device, a capsule-sized swab that’s connected to a thin tube and, when swallowed by a patient, gathers samples from the entire length of the esophagus.

That was followed by another European clearance just a few weeks later, this time for the EsoGuard diagnostic test that’s used to analyze the DNA in cell samples collected by the EsoCheck device.

Altogether, the system is designed to identify biomarkers linked to Barrett’s esophagus, a condition that’s often a precursor to esophageal cancer. Lucid’s technology is so far the first and only diagnostic test on the market that can be used for widespread screening for esophageal cancer, which has no standard screening test but is usually diagnosed by a comparatively more expensive endoscopy and biopsy.

The EsoCheck device previously received 510(k) clearance from the FDA in 2019. Though it proceeded to launch EsoGuard in the U.S. as a lab-developed test, which typically doesn’t require the FDA’s sign-off, Lucid is currently pursuing formal U.S. clearance for the diagnostic, backed by ongoing clinical testing.

That pursuit, plus Lucid’s plans to make its testing products more widely available and build new testing centers to support that expansion, are at the root of its plans to go public, the company wrote in the S-1 filing.

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Lucid was formed in 2018 when PAVmed made a deal with Case Western Reserve University to license the technologies that ultimately became EsoGuard and EsoCheck.

Less than three years later, in February of this year, PAVmed shared in its fourth-quarter 2020 financial report that it was ready to let Lucid spread its wings as a public company. “The Lucid board of directors determined that this long-contemplated step is necessary for Lucid to fulfill its long-term potential, unlock its present value and execute on a major new commercial initiative,” its parent company said.

At the time, PAVmed—which went public in a $5.3 million IPO of its own in 2016—said it wasn’t yet sure whether Lucid would do so via the traditional IPO route or through a reverse merger with a special purpose acquisition company, a method that has become increasingly trendy among medtech and biotech startups in the last few years.