MaxQ-AI Files for IPO
MaxQ-AI (previously known as MedyMatch) recently filed for an $8 million IPO. According to Nasdaq, MaxQ-AI filed confidentially on February 13. The prosepectus filed with the SEC describes MaxQ-AI as “a clinical stage artificial intelligence, or AI, company specializing in improving diagnostic accuracy through deep learning technology.” MaxQ-AI is currently classified as an “emerging growth company” under the 2012 JOBS Act (meaning it had revenues of less than $1.07 billion last fiscal year). MaxQ-AI’s CEO is Gene Saragnese.
According to it’s website, MaxQ-AI focuses on “artificial intelligence driven diagnostic tools.” Its goal is “to deliver A.I. based patient specific clinical decision support applications to improve quality outcomes and reduce healthcare costs.” MaxQ-AI says this will reduce the misdiagnosis rate in the medical industry. MaxQ-AI is currently focused on “continuing to build out capability in the acute care ER setting with a natural extension into trauma.”
MaxQ-AI recently received CE mark approval for its Accipio software platform, which is used for “detection of intracranial hemorrhage” by analyzing non-contrast head CT images. In addition, MaxQ-AI received a “breakthrough device” designation from the FDA for its Accipio software platform. According to the prosepectus, MaxQ-AI has not submitted the Accipio products for FDA approval, but plans to do so in the third quarter 2018.
Last year, MaxQ-AI unveiled partnerships with GE Healthcare, Samsung, and IBM. According to the press releases, each of these companies plans to integrate the Accipio software into existing technology.
MaxQ-AI’s IPO comes on the heels of the busiest quarter for IPOs in three years, according to MarketWatch. In the second quarter of 2018, sixty companies raised $13.1 billion in IPOs.
BioArctic Announces Patent Allowance Entitled Spinal Cord Devices and Methods for Promoting Axonal Regeneration
BioArctic AB, a public Swedish biopharma company, recently announced that they received allowance of a patent application directed to a method of promoting axonal regeneration using a biodegradable spinal cord device. The medical device is said to be a component of BioArctic’s SC0806 product for treatment of complete spinal cord injury. The allowed claims are directed toward “selecting a spinal cord device” having certain geometric characteristics, “positioning peripheral autologous nerves in … through channels,” and implanting the device in an injured spinal cord. The device is said to be soakable in a solution of FGF1 growth factor prior to implantation. BioArctic reports to have received corresponding patents in China and Australia.
According to BioArctic, despite considerable research into bridging spinal cord gaps, no product is yet available on the market. BioArctic states that the SC0806 spinal cord product is currently undergoing Phase 1/2 clinical trials in Sweden and was granted orphan drug status in the European Union and the United States, qualifying the product for 10 and 7 years of market exclusivity, respectively. The product received funding from the European Union’s Horizon 2020 Research and Innovation Program, the EU’s largest public investment program for research and innovation, comprising an €80 billon investment over 7 years, culminating in 2020.
According to BioArctic, in addition to developing treatments for complete spinal cord injury, its research focuses on disease modifying treatments and reliable biomarkers and diagnostics for neurodegenerative diseases, such as Alzheimer’s disease and Parkinson’s disease, for which AbbVie has agreed to develop and commercialize BioArctic’s Parkinson’s antibody portfolio. European Biotechnology rated BioArctic’s €71.8 million IPO as one of Europe’s most successful in 2017.
Penumbra Files for $115 million IPO
Alameda, California-based medical device company Penumbra, Inc. registered with the Securities and Exchange Commission (SEC) last Friday for an initial public offering (IPO) to raise up to $115 million. The company will be traded under the symbol PEN on the New York Stock Exchange (NYSE).
According to its S-1 filing, Penumbra develops, manufactures, and markets medical devices focused on interventional therapies. Founded in 2004, the company’s primary focus has been on neurovascular devices, although it recently entered the peripheral vascular market, and focuses on thrombectomy and embolization technology. According to press releases, Penumbra’s Ace64 aspiration thrombectomy device, reportedly the largest-lumen thrombectomy device on the market, won 510(k) clearance from the FDA last May.
The S-1 disclosed that Penumbra reported sales of $125.5 million in 2014, an increase of 41.3% from 2013, and also that Penumbra maintains a portfolio of 18 global patents, of which seven are U.S. patents. The S-1 also stated that Penumbra owns 31 pending worldwide patent applications.
Acelity Reported to Plan $1 Billion IPO
San Antonio, Texas based medical device company Acelity LP Inc. is reported to be considering an initial public offering that could raise up to $1 billion, according to the Wall Street Journal.
Acelity has reportedly tasked J.P. Morgan Chase & Co., Goldman Sachs, and Bank of America Merrill Lynch with underwriting the deal. The Wall Street Journal noted that proceeds from the IPO may be used to pay down some of the company’s long term debt.
According to news sources, Acelity, formerly known as Kinetic Concepts, Inc., was founded in 1976 and specializes in developing and commercializing wound-care and regenerative medicine products. Apax Partners and two Canadian pension funds acquired Acelity in a $6.1 billion leveraged buyout in November, 2011. Acelity has since made several acquisitions, the most notable being the nearly $500 million purchase of Systagenix, a wound care company spun out of Johnson & Johnson, in October 2013.
According to filings with the Securities and Exchange Commission (SEC), Acelity maintains a patent portfolio of over 2,000 patents and over 1,000 pending patent applications in the areas of wound-care and regenerative medicine, among others.
In November, 2014 Acelity was ordered to pay $34.7 million in damages to nonprofit LifeNet Health after a jury found that Acelity subsidiary LifeCell Corp. infringed a LifeNet patent.
ConforMIS to Go Public in Upcoming IPO
Bedford, Massachusetts-based orthopedic medical device company ConforMIS has filed a registration statement with the Securities and Exchange Commission (SEC) announcing that the company intends to go public and raise $172.5 Million. According to the documents filed with the SEC, the company has not priced the range at which the stock will go public. The stock will be listed as CFMS in the NASDAQ stock exchange.
Founded in 2004, ConforMIS develops and commercializes medical devices for the treatment of osteoarthritis and joint damage. ConforMIS transforms patient CT data into customized implants with a complete set of patient-specific instrumentation using its proprietary iFIT technology. According to the company’s website, ConforMIS maintains a portfolio of over 375 patents and patent applications in the areas of image processing, patient-specific implant systems, patient-specific surgical techniques, patient-specific instrumentation, and manufacturing across multiple joints.
In April, ConforMIS settled patent infringement lawsuits against Wright Medical by granting a license to the company.
SEC Creates New Financing Opportunity
Chairwoman Mary Jo White recently presided over an open meeting of the U.S. Securities and Exchange Commission at which the Commission followed the recommendation of the Division of Corporation Finance to adopt final rules implementing Title IV of the JOBS Act (which previously brought us crowdfunding). The JOBS Act requires the Commission to adopt rules to create a new exemption from registration under the Securities Act for small public offerings. The proposed changes to Regulation A were released in December of 2013. The final rules will become effective 60 days following publication in the Federal Register.
The benefits to small privately held medical device companies could be significant. In what is referred to as “Tier 2” of the regulations, companies will be able to raise up to $50 million in equity investment from private investors in a streamlined IPO-like proceeding. Existing shareholders will be allowed to offer up to $15 million of their equity as a part of that $50 million total. This not only provides companies with a new source of equity financing, it grants founders and early investors the opportunity for a liquidity event potentially well before a conventional IPO or other exit would otherwise have occurred. At the same time, it provides an investment opportunity for qualified investors; and all, it appears, at reduced regulatory burden and cost. It will be interesting later this summer to see what appetite might exist for this new financing and liquidity tool.
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