One of the more important initial public offering (IPO) trends - the increase in United States medical-device companies listing on the Australian Securities Exchange (ASX) - is strengthening.
This week, the latest life-science float, Ventus Medical, launched a $40-million IPO and another US-based company, Osprey Medical, announced it had closed its $20-million offer.
Ventus's lead product, Provent Sleep Apnoea Therapy, provides a non-surgical treatment for people with obstructive sleep apnoea.
The global market is estimated at $2.6 billion a year.
Its other key product, Provent Snoring Therapy, also provides a non-surgical treatment.
Both products are single-use adhesive devices that stick to a patient's nostrils during sleep and help keep their airways open.
They may appeal to sleep apnoea sufferers who find continuous positive airway pressure masks, or custom-made mouthguards, uncomfortable.
The Californian company looks more advanced than other medical-device researchers that have listed on the ASX in the past few years.
Provent Sleep Apnoea Therapy has US Food and Drug Administration (FDA) clearance, and is already being sold in the US, Australia, New Zealand and Hong Kong.
Ventus plans to start selling Provent Snoring Therapy as an over-the-counter treatment to consumers in the US in the second half of 2012, subject to US FDA clearance.
Investor Weekly understands the Ventus IPO, lead managed by Inteq, has attracted good interest from fund managers who like its fast path to commercialisation.
An earlier-stage medical-device maker, Osprey Medical, has closed its underwritten IPO.
Osprey's flagship device treats contrast-induced nephropathy (CIN), a form of kidney injury caused by X-ray visible dye that cardiologists inject during heart procedures such as angioplasty and stenting.
The compnay's Cincor System captures a large amount of dye before it circulates to the kidneys.
The dye is toxic in some kidneys and can cause severe damage.
Osprey says about 25 per cent of all patients undergoing common heart procedures are at risk of acquiring CIN because of a pre-existing kidney disease.
Its core technology was developed in Australia, at the Baker IDI Heart and Diabetes Institute in Melbourne, and funded by local venture capital.
Osprey has promising technology, but in effect has to develop a new market for its product - a factor that dissuaded some local small-cap fund managers from participating in its IPO.
Ventus and Osprey follow three other key US medical-device IPOs since 2010: REVA Medical, Bioniche Life Sciences and GI Dynamics.
REVA is developing a bioresorbable coronary stent to restore arterial blood flow to the heart, and GI Dynamics' lead product, EndoBarrier, is a thin plastic sleeve that lines the first 60 centimetres of the small intestine, causes patients to eat less and lose weight, and treats diabetes and obesity.
The device is implanted through the mouth in a short procedure.
REVA and GI Dynamics were among the larger floats in recent years, raising $85 million and $80 million respectively.
Canada-based Bioniche Life Sciences raised $12.5 million last year. Of the three, only GI Dynamics is trading in line with its $1.10 offer price, after touching 75 cents last year.
REVA's $1.10 issued shares slumped to a 52-week low of 50 cents after disappointing research delays, but have rebounded to 70 cents in recent weeks. Bioniche's $1.45 issued shares are 56 cents.
Poor aftermarket support has been a problem for US medical-device IPOs.
Corporate advisers have told Investor Weekly they expect to see more US medical-device companies list on the ASX this year, given a lack of demand on the Nasdaq exchange for IPOs from pre-revenue companies.
A solid post-listing performance from Ventus or Osprey could boost the sector.
