2012: A lackluster year for medical device and diagnostics IPOs

Put lightly, it was less than a banner year for medical device and diagnostics companies looking to go public.

Some, such as Dx outfit Atossa Genetics, have been waiting all year to complete their filed IPOs, scaling back expected share prices as the outlook dimmed. Others have pulled the plug on their plans entirely, such as Aurora Diagnostics did in June, which scuttled plans to raise $150 million. Even the big successes, such as Globus Medical ($GMED) and its $100 million haul, have endured declining expectations, pricing out at the bottom of their projected ranges.

The result: Only four device and diagnostics companies have completed IPOs so far this year, pulling in a total of $171.8 million. Last year, only three med tech companies went public, pulling down $194 million, according to an Ernst & Young report. So, 2012's a mixed-bag: One more company went public, but the resultant four had less money between them. In 2010, 8 companies notched successful IPOs at a value of $539 million, according to Ernst & Young.

Terry McGuire, co-founder and general partner at Polaris Venture Partners, said the market for IPOs is choppy across the board, and med tech firms face regulatory uncertainties that can scare off investors. "It's an uncertain time, on a macro level," McGuire said in an interview. "We're still seeing how healthcare reform is going to play out, and once, post-election, we get into a more certain world, I think that'll help everybody."

However, while the marketplace seems mired in circa-2008 doldrums, the companies trying to crack it are more innovative than ever, McGuire said. "We think there's an enormous value in device companies," he said. "These companies are doing important things. They offer value propositions--that's the good news. This may be a great opportunity for investors to come into companies now."

Taking life sciences as a whole, the skittish market seems to be affecting med tech disproportionately, as 11 outfits have thus far gone public on the biotech side. But don't count out an IPO rebound for the device and diagnostics industries, as there are millions of dollars at stake in pending offerings.

AutoGenomics is in the midst of another attempt after abandoning a 2008 IPO, looking for $65 million with a filing this month. California's Singulex is seeking $86.3 million on the strength of its heart disease diagnostic, and New Jersey's Cancer Genetics filed a $49 million offering in May. If those offerings come through before Jan. 1, they'll more than double the industry's total for the year. Even if they're prolonged, they certainly pace the industry for a brighter 2013. -- Damian Garde (Twitter | email)

Company: Globus Medical ($GMED)
Initial share price: $12
IPO haul: $100 million
Current share price: $15.97
More: Globus Medical IPO pulls in $100M on lowered expectations

Company: GenMark Diagnostics ($GNMK)
Initial share price: $4.20
IPO haul: $45 million
Current share price: $8.51
More: GenMark seeks $42M IPO

Company: Osprey Medical ($OSP.AX)
Initial share price: $0.41
IPO haul: $20.8 million
Current share price: $0.40
More: Osprey closes Australian IPO 

Company: MRI Interventions ($MRIC)
Initial share price: $1.10
IPO haul: $6 million
Current share price: $2.10
More: MRI Interventions Announces Completion of $6 Million Financing


2012: A lackluster year for medical device and diagnostics IPOs