The National Venture Capital Assn. is spearheading a drive to get a bill through the U.S. Senate that would make it easier for small companies to raise money by going public.
The "IPO On Ramp" measure would ease the regulatory requirements for IPOs and temporarily reduce the reporting burdens imposed by the Sarbanes-Oxley Act.
The bill sailed through the U.S. House last week on a 390-23 vote. Today, the NVCA sent a letter signed by 700 entrepreneurs to Sens. Harry Reid (D-Nev.) and Mitch McConnell (R-Ky.), the leaders of the Senate, to urge passage of the bill.
"During the past decade, emerging growth companies have faced numerous new challenges when considering an IPO. The regulatory on-ramp provisions thoughtfully address many of these issues and, for the first time in years, will provide much needed support for small companies with big potential. As more than 90 percent of job creation occurs after a company goes public, there has never been a more important time than today to pass this legislation," according to the letter (PDF). "On behalf of America’s start-ups, we are committed to do great things – develop new products and services, create significant shareholder value, and hire more Americans. But we need your support. The time has come to bring this legislation across the finish line. We urge you to pass S. 1933 and lead our country towards a new era of economic growth."
The relaxed securities regulations would apply to firms logging less than $1 billion in annual revenues or those posting less than $700 million worth of publicly traded stock after an IPO, according to the Wall Street Journal.
The bill hasn’t met with uniform support, despite backing on both sides of the aisle and from the White House. Although supporters claim the new rules would only apply to about 12% of IPOs, that number is more like 98%, according to former chief SEC accountant Lynn Turner.
Citing IPO data going back to the 1970s, Turner warned legislators of the risk that the bill could have serious unintended consequences like measures passed early in the last decade that helped bring down the economy in 2008, according to the newspaper.
The Financial Accounting Standards Board’s overseers warned that the measure might hurt investors and "raises serious issues about the continued independence of the standard-setting process," according to the Journal, and the Consumer Federation of America said the bill reflects a lack of understanding of how markets work.
"It assumes that investors will respond to rolled-back investor protections without imposing a higher cost of capital or demanding a premium to balance that risk," director Barbara Roper told the newspaper.
VCs shift focus from high-tech med-tech
Speaking of venture capitalists, Kaiser Health News reports that VCs who invest in the health care space are shifting their focus from high-tech devices like Intuitive Surgical’s (NSDQ:ISRG) da Vinci surgical robot toward products
that lower health care costs and/or reduce the number of patients in the health care system. Read more
S&P affirms Boston Scientific’s BBB rating
Standard & Poor’s reaffirmed its "BBB" rating on Boston Scientific (NYSE:BSX) in the wake of the medical device maker’s buyout of Cameron Health last week.
"The stable rating outlook reflects our expectation that it has sufficient global and product diversity, and financial cushion, to absorb a modest revenue decline in 2012 and fund the Cameron Health acquisition with internally funded cash," according to the ratings agency. Read more
Allezoe CEO gets threats over PR policy
Allezoe Medical (OTC:ALZM) CEO Michael Gelmon and the company’s offices have been deluged with demands that it issue more press releases, including threats against Gelmon and other executives at the company.
"The intense pressure on management to release information, whether appropriate or not, has now escalated to physical threats and demands against myself and other members of management and consultants, as a result of which we have begun to record the threats and the telephone numbers of the sources of these threats for action by the appropriate authorities," Gelmon said in prepared remarks. "Management is focused on acquisitions and the development of our acquired technologies, and will release information on these activities only as and when it is appropriate."
Last week, Allezoe said secretary and director Hyman White broke its internal rules and possibly state and federal laws when he wrote an affidavit supporting the un-named plaintiff in a lawsuit filed against Allezoe. Read more
Report: Angels in America spent more on device makers last year
The Angel Resource Institute, Silicon Valley Bank and CB Insights released the first Halo Report detailing angel investments made last year in the U.S. The report shows that 60% of the health care spend last year went to device makers, up from 57.4% in 2010. The median funding round was $700,000, according to the report. Read more
Flextronics buys Stellar Microelectronics
Flextronics (NSDQ:FLEX) agreed to acquire Stellar Microelectronics for an undisclosed amount. Read more
Philips Healthcare wins U.S. Army training contract
The U.S. Army’s Medical Research Acquisition Activity said it plans to issue a sole-source contract to Philips Healthcare (NYSE:PHG) for 2 training classes for Bucky TH & PCR Eleva-S-Plus Deployable X-ray Systems. Read more
OTC exchange lists Avita Medical
Avita Medical (ASX:AVH) said the OTCCQX International exchange will list its shares under the "AVMXY" ticker. Read more
iCad wins NASDAQ reprieve
iCad (NSDQ:ICAD) won a 180-day reprieve from the NASDAQ stock exchange, giving it another 6 months to get its share price back above $1 for 10 days in a row.
In September, the exchange gave the Nashua, N.H.-based imaging software maker until March 7 to raise the share price above NASDAQ’s $1 minimum requirement, or risk a de-listing. Read more
GPOs: Premier awards new patient monitoring, chest drainage contracts
Premier healthcare alliance said it awarded new contracts for patient monitoring systems and chest drainage products to GE Healthcare (NYSE:GE), Philips Healthcare (NYSE:PHG), Nihon Kohden (TYO:6849), Authentidate (NSDQ:ADAT), CJPS Healthcare Supplies & Equipment, Welch Allyn and Atrium Medical.
- Aastrom lands $40M from Eastern Capital
- Athersys reels in $9M private placement
- LensAR raises $24M
- Mobi drums up $573k
- Halt Medical puts up $20M debt/equity round
Analysts’ ups and downs
- Abbott (NYSE:ABT): Jefferies reiterates Buy rating, lifts price target from $65 to $76.
- Boston Scientific (NYSE:BSX): Zacks Investment Research reaffirms "neutral" rating; Leerink Swann reiterates "outperform" rating, $8 price target.
- C.R. Bard (NYSE:BCR): Morgan Keegan maintains" outperform" rating, $105 price target.
- CareFusion (NYSE:CFN): Goldman Sachs raises its price target to $28, maintains "neutral" rating.
- DexCom (NSDQ:DXCM): Zacks Investment Research maintains "neutral" rating.
- Edwards Lifesciences (NYSE:EW): Leerink Swann lowers sales, earnings estimates, maintains "outperform" rating, $90 price target; Goldman Sachs reiterates "conviction buy" rating, trims price target from $90 to $88.
- Intuitive Surgical (NSDQ:ISRG): Goldman Sachs raises price target to $567, sticks to "neutral" rating.
- Johnson & Johnson (NYSE:JNJ): Jefferies initiates coverage at "hold."
- Medtronic (NYSE:MDT): Argus lowers rating from "hold" to "sell."
- Nobel Biocare (VTX:NOBN): Goldman Sachs upgrades to "conviction buy" from "neutral" .
- NuVasive (NSDQ:NUVA): Goldman Sachs raises price target from $14 to $16, maintains "neutral" rating.
- Smith & Nephew (FTSE:SN): Goldman Sachs cuts rating to "neutral" from "buy," lowers price target to £7.10 from £7.40.
- Thoratec (NSDQ:THOR): Goldman Sachs increases price target to $36, keeps "neutral" rating.
- Volcano (NSDQ:VOLC): Goldman Sachs upgrades from "neutral" to "buy," sets $36 price target.
