US-based cardiac arrhythmia diagnostics technology developer iRhythm Technologies went public yesterday in an upsized initial public offering that valued the company at $107m and gave pharmaceutical firm Novo an exit.
The company priced 6.3 million shares at $17 each, above the $13 to $15 range it set earlier this month, when it planned to offer 5.35 million shares. It opened at $26.75 on its first day of trading on Nasdaq yesterday and closed at $26.05.
Founded in 2006 as a spinout of Stanford University, iRhythm is developing an ambulatory electrocardiogram that will use a wearable biosensor to monitor patients at risk for arrhythmia.
The proceeds from the offering will support research and development as well as an expansion of iRhythm’s sales and operational capabilities. The cash may also fund clinical studies and trials and international growth.
The IPO came after $112m in equity funding and $3.5m in debt, with Novo leading iRhythm’s $28.5m series E round, which closed in May 2015.
Kaiser Permanente Ventures, the investment arm of care provider Kaiser Permanente, was among the investors in a $16m round in 2013, participating alongside venture capital firms Norwest Venture Partners (NVP), New Leaf Ventures and Synergy Life Science Partners.
Medical device producer St. Jude Medical had led a $10m round for iRhythm in 2010 that included Synergy and Mohr Davidow Ventures. The three were joined by New Leaf in a $22.1m round that closed in 2012.
Novo bought 100,000 shares in the offering but its share in iRhythm was cut from 13.7% to 10.1%. The stake held by Kaiser Permanente Ventures was diluted from 9.4% to 6.7%, and St. Jude’s from 7.2% to 5.1%.
Synergy Life Science will hold an 11.5% stake post-IPO, while New Leaf Ventures, which bought 125,000 shares, has an 8.6% share. Other prominent shareholders include NVP (11.2%) and Mohr Davidow’s MDV–Revelation vehicle (6.8%).
Joint book-running managers JP Morgan and Morgan Stanley and co-managers Canaccord Genuity and BTIG have a 30-day option to buy 944,000 additional shares, which would lift the size of the offering to $123m.