EndoStim today officially spiked an initial public offering it hoped would raise $35 million for its neurostimulation device for gastroesophageal reflux disease.
EndoStim, which had planned to put $10 million of the IPO’s proceeds into clinical studies and another $14 million to commercialize the system, tabled the offering in October 2014. Today the company filed a formal withdrawal request with the U.S. Securities & Exchange Commission, citing “market conditions.”
Santé Health Ventures was the biggest contributor to some $26 million in funding EndoStim secured across three rounds between 2010 and 2014, with the Austin, Texas-based life-sciences investor holding 19% of EndoStim shares heading into the IPO. The company said the IPO could reach $35.8 million if underwriters exercise their over-allotment.
Wedbush Securities was to be the lead underwriter alongside Craig-Hallum Capital Group and Roth Capital Partners. EndoStim was aiming to sell 3.2 million shares on the NASDAQ exchange under the STIM symbol, priced between $10 and $12 per share.
EndoStim describes its system in form and function to a pacemaker, with the device delivering low-level electrical stimulation to the lower esophageal sphincter, a muscle at the junction of the esophagus and stomach. The company touts the neurostimulation system as minimally-invasive, reversible and preserving intact the anatomy of the esophagus and stomach.
The company says between 15% and 20% of the population suffer from gastroesophageal reflux disease, which is most often treated with proton pump inhibitors like Nexium and Prilosec, which suppress the production of acid in the stomach. Those drugs do not address the functioning of the LES.
EndoStim received CE Mark approval in 2012 to market its system in Europe and has an additional office in The Hague. The company generated $300,000 in revenue last year, reporting a $7.5 million loss.
The FDA has approved an investigational device exemption that allows EndoStim to conduct a clinical trial in the U.S.