2015 signals more muted public appetite for medtech
This article was originally published in Clinica
2015 saw a drop in IPO activity for medtech, with Clinica recording 27 completed IPOs this year to date, compared to 36 in 2014. Eight IPOs filed this year were still pending, while three companies shelved their plans altogether, all citing inclement market conditions as a reason.
Of the remaining two companies that filed for IPO this year, one – Gelesis – turned their back on the public markets after successfully raising more money privately from institutional investors. The other, SurgiQuest, found itself in the happy situation of being acquired – what many consider to be a true exit – for $265m by ConMed, only two weeks after registering its IPO.
Gelesis filed its IPO withdrawal with the US Securities and Exchange Commission a day before a Dec. 18 announcement about a $31.5m growth financing from institutional investors, including newcomer Cormorant Asset Management, and existing shareholders Invesco Asset Management, PureTech and the Priztker/Vlock Family Office. This financing round accounts for a third of the total investment put into Gelesis to date, and the proceeds will enable the Boston company to complete the US pivotal trial of its weight loss “smart pill” Gelesis100. The firm anticipates enrolling patients to the trial sites in 2016 and file for FDA approval in the first half of 2017.
Gelesis is an orally administered capsule containing small hydrogel particles, which are released in the stomach and expand by absorbing water, giving the patient a feeling of fullness while slowing the rate at which the stomach contents are emptied into the small intestine. The particles partially degrade in the large intestine, water is release and reabsorbed by the body and particles are eliminated from the body naturally.
Gelesis’ news reflects what looks to be a bumper year for private equity financing, with takings between January to November already having overtaken the total venture dollars raised in 2014.
Expectations Not Too Bad
Of the 27 completed IPOs, just over half – 14 – either met or were above the company’s expectations in terms of funds raised. The remaining 13 companies had to make do with a smaller IPO, with cancer therapy company NovoCure having suffered the biggest downsizing, cutting its initial target of $300m to $165m.
Six companies achieved their fundraising target, while proportionally the most successful IPO was glaucoma company Glaukos, which had expected to raise $86m but ended up with around $125m.
For more details of this year’s IPO activity, see table below: