Vnus Buy Latest Big Win for 2004 Device IPO Class
Article preview reprinted from Start-Up - May, 2009
The medical device industry broke the IPO ice in 2004, sending 17 companies onto the US public markets. How have they fared?
Vnus Buy Latest Big Win for 2004 Device IPO Class
Article preview reprinted from Start-Up - May, 2009
In this season of commencements and keynote addresses, the acquisition of VNUS Medical Technologies Inc. by Covidien Ltd. brought us back to the notable medical device IPO class of 2004. Five years ago, these 17 medical device companies ended the sector's 7-year initial public offering drought, which set in following the disappointing group of device companies that went public in 1995-96.
Until 2004, device companies had only sporadic success selling their stories on the public market; even the post-technology boom that carried biopharmaceutical companies didn't pull medical devices along. Device VCs spent all those years in the dark, pouring time and capital into a new class of companies. More than $1.6 billion of that money went into the 17 companies that eventually stepped forward to give venture investors a second possible path to exit. The list included VNUS, Conor Medsystems LLC, IntraLase Corp., FoxHollow Technologies Inc., Kinetic Concepts Inc., NuVasive Inc., Stereotaxis Inc., Symmetry Medical Inc. and Cutera Inc., which was the first medical device company to break through that year.
Those companies have produced some worthwhile results. All together, the 17 companies raised $971 million from IPO investors. (See Exhibit 1.) The post-money valuation at the time of the IPOs totaled close to $6 billion, more than three times the number of venture capital dollars committed. Aesthetics company Cutera scored the highest in this category by obtaining $148 million valuation on just $7.74 million invested. The post-IPO valuation, of course, is little more than a score card, as most life sciences venture investors typically stay with a company well past the six-month lock up. (Coincidentally, Cutera investor Alta Partners actually managed to sell some of its shares during the IPO.)
Purchase this article online as a PDF and receive it immediately via email. Questions? Call (800) 332-2181. 100% Satisfaction Guaranteed. Subscribe to Start-Up.
Companies mentioned in this article:
VNUS Medical Technologies Inc.
FoxHollow Technologies Inc.
START-UP: No publication reviews leading edge companies and technology better than START-UP. Each issue of START-UP profiles the most important new product companies, identifies the hottest technology areas, reviews funds flowing into private companies and investment trends, and reports on university tech transfer licensing. Industries covered: pharmaceuticals, biotechnology, medical equipment & devices, and in vitro diagnostics. Subscribe to START-UP.
