US-based medical device developer ElectroCore has raised $78m in an initial public offering that secured an exit for pharmaceutical firm Merck & Co’s Global Health Innovation (GHI) Fund.
The offering consisted of 5.2 million shares issued on the Nasdaq Global Market priced at $15 each. The company’s shares opened at $18.94 on their first day of trading on Friday and are trading at $19.00 at time of publication.
ElectroCore has developed a device called GammaCore that treats pain caused by migraine and episodic cluster headache by stimulating the vagus nerve, and it intends to begin selling the system commercially in the third quarter of 2018.
Roughly $35m of the IPO proceeds will support GammaCore’s launch in the US, while a further $10m will fund development of treatments based on the technology for headache and rheumatology. It has earmarked $3m for enhancing distribution channels for the device’s next iteration.
The company had already raised $500,000 in seed funding in 2012 when it closed a $50m series A round featuring Merck GHI, Easton Capital and Core Ventures two years later.
Core Ventures subsequently led ElectroCore’s series B round, which closed at $70m in December 2017, investing together with Merck GHI, which provided $5m according to the IPO filing, Gakasa, American Investment Holdings and Viniky Family Foundation.
Merck GHI’s 13.2% stake was diluted to 10.8% in the offering. ElectroCore’s largest investor remains Core Ventures, which holds a 32.4% stake post-IPO through two different vehicles.
Joint book-running managers Evercore ISI, Cantor Fitzgerald and JMP Securities and lead manager BTIG have a 30-day option to buy another 780,000 shares, which would boost the size of the offering to $89.7m.