US-based cardiac diagnostics technology developer iRhythm Technologies set the terms yesterday for an initial public offering that will give an exit to pharmaceutical firm Novo.
The company will issue 5.35 million shares priced between $13.00 and $15.00, which would place the size of the IPO at $80.3m to $91m. Should the underwriters take up the option to acquire another 800,000 shares the size of the offering could reach almost $105m.
Founded in 2006 and spun out of Stanford University, iRhythm is working on an ambulatory electrocardiogram that will utilise cloud-based data analytics and machine learning to monitor patients at risk for arrhythmias, or heart rhythm disorders.
The system uses a biosensor patch that converts data derived from millions of heartbeats into information that can be inform decisions on clinical treatment.
The IPO proceeds will go to strengthening iRhythm’s sales capabilities as well as its research and development, expanding globally and conducting or sponsoring clinical trials.
Novo invested $17.6m to lead a $28.5m series E round for iRhythm that closed in May 2015, and which included Norwest Venture Partners (NVP), increasing the company’s total funding to about $112m in equity and $3.5m in debt financing.
Medical device maker St. Jude Medical led a $10m round for the company in 2010, investing together with Mohr Davidow Ventures and Synergy Life Science Partners, the three returning for a $22.1m round also backed by New Leaf Ventures that closed in early 2012.
Kaiser Permanente Ventures, the corporate venturing arm of care consortium Kaiser Permanente, took part in a $16m round in 2013 that included NVP, New Leaf and Synergy.
Novo holds a 13.7% share of iRhythm that will be diluted to 10% in the offering. Kaiser Permanente Ventures’ stake will be cut from 9.4% to 6.9%, and St. Jude’s from 7.2% to 5.3%.
Other notable shareholders include Synergy, which will emerge with a 12% stake post-IPO, NVP (11.7%), New Leaf (8.8%) and Mohr Davidow’s MDV–Revelation vehicle (7.2%).
JP Morgan Securities, Morgan Stanley, Canaccord Genuity and BTIG have been appointed underwriters for the offering.