Life Is Swede For Medtech IPOs

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Includes: ARKG, BIB, BIS, CNCR
by: EP Vantage

It is midsummer's day and Sweden is very hot - in terms of IPOs, at least. Five IPOs have launched on Stockholm-based exchanges today, including two offerings by medtech companies. Bonesupport, which makes bone grafts impregnated with anti-infectives, and Sedana Medical, which makes pumps for delivering anesthetics, have raised $57m and $13m respectively.

"It's a slightly unusual day," says Richard Davies, Bonesupport's chief executive. "There's definitely a sort of liquidity to the market - I can only speak from the healthcare side - that likes these life sciences companies." And the day is even more unusual considering how few IPOs have gone out so far in 2017 - only six, three of which have been in Sweden (see table).

So quiet has the IPO scene been this year that Bonesupport's is the largest, more than twice the size of second-place Visioneering Technologies, which went out on the Australian exchange in March.

The right time

The company wants to boost its US growth - it has three orthobiologics on the market in Europe but only one in the US (Bonesupport fills the void with $37m, October 27, 2016). It also needs cash for its US approval trial of Cerament G, a bone void filler designed to elute gentamycin to promote healing. This is on track to permit an FDA filing in 2020, with approval in 2021.

Of course, it could have drummed up cash via a venture round - Bonesupport has raised $72m in VC cash since 2006, according to EvaluateMedTech. But the welcoming nature of the Swedish exchanges at the moment had not gone unnoticed.

"We felt this was the right time for our company. The market in Sweden is open to companies like ours," says Mr. Davies. "We're Swedish, our founder is Swedish and our investors predominantly have been Swedish. So for us it was the right place to go - a market that seems to appreciate the growth prospects we have."

At SEK29 per share, the deal will confer a market capitalization of SEK1.4bn ($162m) on Bonesupport if the over-allotment option is fully used. Sweden generally sees relatively high activity from retail investors, but over 60% of Bonesupport's shares have gone to institutions.


Bonesupport's largest shareholders*
Investor % held
HealthCap V 13.5
Stiftelsen Industrifonden 9.8
Lundbeckfond Invest 9.8
Swedbank Robur Fonder 9.2
Tredje AP-fonden 8.3
Carl Westin 5.5
Tellacq 5.3
Total 61.4
*Assuming the over-allotment option is exercised in full.

Mr. Davies says this is not an unusually high proportion. The cornerstone investor Swedbank Robur was joined by the company's existing venture capital owners, he says. "It feels like that's a good mix because the development timelines within healthcare, for businesses like us, are relatively long."

Stock home

Today's other Swedish medtech IPO, on the alternative Nasdaq First North exchange, is that of Sedana Medical, which makes a device called AnaConDa. This stands for - almost - anesthetic conserving device; it is designed to administer volatile anesthetics such as isoflurane or sevoflurane to invasively ventilated patients. The other three are Momentum, a spin-out of the industrial and construction equipment firm B&B Tools, and real estate companies Trianon and Quartiers Properties.

These groups were pre-empted by Integrum, whose tiny $2m IPO was launched on Nasdaq First North in May. The company makes bone-anchored prostheses, such as artificial legs, for amputees.

All of which means Stockholm has seen three IPOs so far this year, worth $72m in total, to three in the entire rest of the world worth a total of $40m. Stockholm is not the new New York, but Swedish medtech companies looking for cash might want to seize their chance to raise money right on their doorstep.


2017's medtech IPOs
Date Company Amount raised ($m) Offering price Exchange Focus
28 Mar Visioneering Technologies 25 Aus$0.42 Australian Securities Exchange Ophthalmics
9 May Endra Life Sciences 10 US$5 Nasdaq Diagnostic imaging
15 May Integrum 2 SEK20 Nasdaq First North Orthopaedics; physical medicine
12 Jun Myomo 5 US$7.5 NYSE Cardiology; physical medicine
21 Jun Bonesupport 57 SEK29 Nasdaq Stockholm General and plastic surgery; orthopaedics
21 Jun Sedana Medical 13 SEK19.5 Nasdaq First North Drug delivery
Source: EvaluateMedTech.