Inspire Medical Systems, a US-based sleep apnea device developer spun out of medical device maker Medtronic, raised $108m in an initial public offering on the New York Stock Exchange yesterday.
The offering consisted of 6.75 million shares priced at $16 each, the top of its $14 to $16 range. The underwriters have a 30-day option to buy more than 1 million more shares, which would lift the IPO to just over $124m.
Founded in 2007, Inspire Medical has developed what is so far the only neurostimulation treatment for sleep apnea, a disorder where breathing is interrupted during sleep, to get approval from the US Food and Drug Administration.
The company plans to use $65m of the IPO proceeds to commercialise the Inspire system, and will put another $12m into research and development for additional products. It had raised some $109m in funding since being spun out of Medtronic.
Medtronic and pharmaceutical group Johnson & Johnson both participated in Inspire’s last round, a $37.5m series F in late 2016 that was led by Amzak Capital Management, the investment firm representing the Kazma family, which invested through subsidiary Amzak Health.
Orbimed, US Venture Partners (USVP), Synergy Life Science Partners and Kleiner Perkins Caufield & Byers (KPCB) also took part in the 2016 round, all as existing backers. The company’s earlier investors include TGap Ventures and GDN Holdings.
Medtronic owned a 5.7% share of Inspire that was diluted to 3.8% in the offering. Its other main shareholders are USVP (a 10.7% stake post-IPO), Orbimed (10.5%), Synergy (10.4%), KPCB (9.6%) and Amzak (6.8%)
BofA Merrill Lynch and Goldman Sachs are joint book-running managers for the IPO, while Guggenheim Securities, Stifel and Wells Fargo Securities are co-managers.
Inspire’s stock opened at $24.49 yesterday and closed at $24.98 representing a 56% pop, giving it a market capitalisation of approximately $324m.
– Photo courtesy of the New York Stock Exchange.