TransMedics, a US-based medical device producer backed by pharmaceutical firm Pharmstandard International and steel conglomerate Posco, went public yesterday in a $91m initial public offering.
The company issued 5.69 million shares priced at $16.00 each on the Nasdaq Global Market, achieving a market cap of $430m. Its shares had risen to $22.49 by yesterday’s close, on their first day of trading.
Founded in 1998, TransMedics has developed a device called the Organ Care System (OCS), which uses warm blood perfusion to preserve hearts, lungs and livers while they are being transported for use in transplants. The technology also allows physicians to assess to viability of an organ prior to transplant.
The company will use $25m of the IPO proceeds to support commercialisation of its lung-focused device, OCS Lung, and, if it is approved, the heart-focused OCS Heart system.
Another $20m will fund research and development for next-generation OCS technology and approximately $15m has been allocated to costs related to clinical trials.
TransMedics had raised more than $253m in equity and debt financing prior to the offering. It most recently closed a $63.7m round in 2016 after adding a $12.5m extension from unnamed backers to a $51.2m first tranche co-led by Pharmstandard’s InBio Ventures unit earlier the same year.
InBio Ventures co-led the round with Fayerweather Fund, Ervington Investments and BioStar Ventures. The first close also featured biotech producer Lung Biotechnology PBC, Abrams Capital, Flagship Ventures and Kleiner Perkins Caufield & Byers (KPCB).
The company’s earlier investors include Posco Bioventures, a biotechnology-focused investment fund set up by steel conglomerate Posco and managed by its private equity subsidiary, Medivate Partners.
Sofinnova Partners, Chase Capital Partners, MedEquity Investors, 3i US, CB Health Ventures, Sherbrooke Capital, Novel Bioventures, Alta Partners, Sagamore Bioventures, VantagePoint Venture Partners, Tudor Investment, Foundation Capital, OneLiberty Funds and JP Morgan are also among TransMedics’ shareholders.
Lung Biotechnology is the only corporate backer to own more than 5% of the company’s shares, through its stake was diluted from 17.6% to 12.6% in the offering. Abrams Capital owns 17.3% post-IPO, Flagship Ventures 12.5%. Fayerweather Fund 7.1%, OneLiberty Funds 6.2% and KPCB 4.9%.
Morgan Stanley and JP Morgan are joint lead book-running managers for the offering, while Cowen and Canaccord Genuity are co-managers. They have the 30-day option to buy more than 850,000 additional shares which would boost the size of the IPO to about $105m.
