As Kips Bay Medical awaits an estimated $21.2 million initial public offering, it’s also rolling out its first product in Europe.
The Minneapolis-based company won CE Mark approval to begin selling its eSVS Mesh product in Europe last May. Since then it’s shipped only about 165 units in half a dozen countries, according to the company’s IPO registration filing with the Securities & Exchange Commission.
“[W]e have not generated significant revenue from the sale of products to date,” the company wrote in the Jan. 18 filing.
The mesh has been implanted at four centers in Switzerland, five centers in Italy and one in the United Arab Emirates. Other countries with distributors include Ireland, Turkey and the United Kingdom.
Kips Bay Medical COO Mike Winegar doesn’t sound discouraged. The company is selling a new product, and along with that comes a fairly long educational process, he said.
“Every month we sell a few more than we sold the month before, and we’re working through the process, but things are going pretty well,” Winegar said.
The company’s nickel-titanium alloy mesh, called eSVS Mesh, is used to reinforce leg veins that are grafted to the heart during coronary artery bypass surgery. Studies have shown that six in 10 of these vein grafts fail within a decade, and up to 20 percent fail within just one year of the procedure. Unlike arteries, veins typically don’t carry much blood pressure and so they don’t develop the same muscular walls that healthy arteries do.
“In very simple terms, what our mesh does is makes the vein act like an artery. It makes it stronger, it makes it a little bit smaller, and it makes it smoother so that they’ll last longer,” said Winegar.
As noted in the regulatory filing, Winegar said Kips Bay doesn’t believe it has any direct competitors. It’s aware of two other companies that make mesh devices for use on blood vessels. One is not intended for use in coronary procedures, however, and the other is meant only for irregularly shaped veins. The original technology was developed at the University of Cape Town in South Africa. Medtronic bought the rights to it in 2003 and now licenses the technology to Kips Bay.
Kips Bay announced plans last April for an IPO that would have raised $57.5 million. What’s changed since then? Company officials said they couldn’t comment, citing SEC rules. The company has changed underwriters since the first filing. New disclosures in the January filing include note that results of an initial human trial were inconclusive on effectiveness due to “complicating factors.”
The company hopes to sell at least 2.8 million shares for $8 to $10 each, leaving the company with about $21.2 million after commissions and other expenses, according to the company’s IPO filing. It plans to use up to $10 million on clinical trials and other expenses related to gaining Food & Drug Administration approval. Another $3 million is slated for developing and testing new applications for eSVS Mesh, and $5 million is planned to be set aside for payments to Medtronic.
If the IPO is successful, the company will trade on the NASDAQ market under the symbol KIPS.