NeuroPace, a US-based epilepsy treatment device developer backed by medical device maker Medtronic and pharmaceutical firm Johnson & Johnson, raised $102m yesterday in an initial public offering on the Nasdaq Global Select Market.
The company priced 6 million shares at $17 each, at the upper end of the $15 to $17 range for the offering. They closed on $24.96 on their first day of trading, representing a market capitalisation of approximately $575m.
Founded in 1997, NeuroPace has developed a medical device that is implanted in the brain to treat patients with drug-resistant epilepsy. The proceeds of the offering will be used for research and development, clinical studies and general corporate purposes.
NeuroPace had received approximately $254m in funding pre-IPO, including $67m in a September 2020 round led by private equity firm Accelmed Partners that also featured Medtronic, Revelation Partners, Soleus Capital, KCK Group and Orbimed.
The round consisted of $33m of equity funding and $34m of debt financing from a previous round that was converted into equity. KCK Group and Orbimed had co-led a $74m funding round for NeuroPace in 2017.
Johnson & Johnson’s corporate venturing unit, Johnson & Johnson Innovation – JJDC, led an $18m funding round for the company in 2013 that was also backed by MedVenture Associates, Kleiner Perkins Caufield & Byers, Interwest Partners and New Enterprise Associates.
The company had previously pulled in $49m from a 2011 round likely to have featured Johnson & Johnson Innovation – JJDC, while Domain Associates, DAG Ventures and Glynn Capital Management are also among its earlier backers.
KCK Group is the largest NeuroPace shareholder, with a stake diluted from 32.9% to 25.1% through the offering. Its other notable investors include Orbimed (16.9% post-IPO), Accelmed (15.4%), Medtronic subsdiary Covidien Group (4.8%) and Leerink Revelation Healthcare Fund, jointly established by Leerink Capital Partners and Revelation Partners (4.2%).
JP Morgan, Morgan Stanley, Wells Fargo Securities and SVB Leerink are joint book-running managers for the offering and have a 30-day option to acquire an additional 900,000 shares, potentially increasing its size to over $117m.