Wednesday 21 March 2018

Mainstay IPO to value 'med tech' firm at over €100m

Device group seeking to raise €20m

Roisin Burke

An Irish medical device company that may have the solution to chronic back pain has launched an IPO to fund its next stages of development.

Mainstay Medical International listed on the ISEQ's ESM and the Euronext in Paris last week aiming to raise in the region of €20m, valuing the company at around €100m.

It initially offered 851,175 shares at a price range of €20-€27 a share but may add to that to extend to almost 1 million shares in total, depending on demand in coming weeks.

Irish backer Fountain Healthcare Partners, a life sciences venture capital fund and current investor, will put a further €1.47m into the IPO. Fountain managing partner Manus Rogan is on the Mainstay board. Fountain led Mainstay's last funding round in 2012, raising €15.3m.

Its other investors include French funds Sofinova and Seventure, US medical devices giant Medtronic, Belgian VC Capricorn Venture Partners, and Twin Cities Angels – a US startup investor, which along with Fountain is backing the IPO with up to €8m.

Mainstay's key product is a back implant called ReActiv8, and funds raised from the IPO are being used to finance its clinical trials. The nerve-stimulating implant aims to treat chronic debilitating lower back pain where surgery isn't suitable. It estimates that the market in Europe and the US is around 2 million people.

The company's headquarters is in Dublin, to where it relocated from Minnesota after its last funding round in 2012, and it also has divisions in the US and Australia. Its European feasibility study last year showed a statistically significant and clinically important improvement in key outcomes including reduction in back pain and disability and improved quality of life for lower backpain sufferers.

Clinical trials are already under way in Australia, where the regulatory approval system is faster. Mainstay hopes to have CE Mark approval (ie, the European health and safety standard clearance) by the end of this year, after which commercialisation in Europe will begin.

The company is planning to file for FDA approval in the US and start clinical trials there this year.

"It's such a large potential market," said Malahide-based chief executive Peter Crosby.

"It's big enough that market size won't be a limit to our growth. We don't have to capture a lot in order to be financial successful."

The target price for the device is likely to be €15,000 and the achievable market is "in the billions", said Crosby.

The company chose the Euronext listing for the profile it has in the medical device sector. "The Euronext has become the go-to place to get listed in the medtech space," said Crosby. "It's where investors look and is known globally for early stage medtech companies."

After the IPO, it intends to expand its staff numbers globally, including in Ireland.

Ireland has a cluster of 250 medtech companies, with 19 of the world's top 25 firms based here. The industry employs 25,000 in Ireland.

Davy, Kempen & Co and Societe Generale are joint bookrunners in connection with the IPO, with Davy also acting as ESM adviser.

Sunday Indo Business

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