US-based medical device producer Obalon Therapeutics raised $75m when it floated on Nasdaq yesterday, giving an exit to medical equipment distributor Bader Sultan & Bros and cosmetics producer AmorePacific.
Obalon issued 5 million shares priced at $15.00 each. The underwriters have a 30-day option to acquire another 750,000 shares, which would lift the size of the initial public offering to approximately $86.3m.
Founded in 2008, Obalon develops medical devices that help obese and overweight people lose weight. Its lead product, a swallowable, gas-filled intragastric balloon, was recently awarded premarket approval by the US Food and Drug Administration.
The company intends to spend between $30m and $35m of the proceeds on sales and marketing to commercialise the balloon system, and between $3m and $5m to expand its manufacturing capabilities. An extra $13m to $15m will support research and development.
Obalon had raised $60m in equity funding, including $5m from AmorePacific in 2012, and $11.5m in debt financing according to press releases and securities filings.
Kuwait-based Bader Sultan & Bros, the sole distributor of Obalon’s products in the Middle East, provided $6.6m of the $20.6m raised by the company in late 2014, and an additional $1.3m the following year.
Bader Sultan & Bros held an 8.8% stake pre-IPO that was diluted to 6.2%. Domain Partners’ stake was cut from 34.6% to 24.2%, while InterWest Partners emerged with a 14.7% share and Okapi Venture Capital 5.4%.
UBS Investment Bank, Canaccord Genuity and Stifel are joint book-running managers for the IPO, while BTIG is co-manager.
– Image courtesy of Obalon.