$1 Billion Medtech IPO Bites the Dust

Citing lousy market conditions, wound care and regenerative medicine company Acelity has withdrawn its application to launch an initial public offering.

Nancy Crotti

A Texas medtech company that announced plans to launch an IPO expected to raise $1 billion last August has scrapped those plans.

Acelity Holdings, Inc., of Alamo City, TX, has filed a report with the Securities and Exchange Commission asking to withdraw its plans, "in light of current public market conditions." The wound care and regenerative medicine company was listed last year among the top players in the tissue-engineering market by Grand View Research.

The research firm forecast that the tissue-engineering market would be worth $11.5 billion by 2022--up from $4.7 billion in 2014--but the industry's evolving capabilities apparently weren't sufficient to attract enough investors to Acelity.

The initial applications of biomaterials and tissue engineering were confined to surgical manipulation of tissues and prosthetics. But now applications have expanded into cardiac, corneal, liver tissue engineering and others, according to the report.

Acelity CEO Joseph Woody assured the San Antonio Business Journal that the global company is healthy, and that the SEC asked Acelity to withdraw its IPO registration statement because of a challenging IPO market in the U.S. Acelity had been seeking up to $100 million in funding.

"The company is performing well and Acelity continues to pursue its long-term strategy," Woody told the newspaper.  "We have recently completed significant refinancing of long-term debt, which enables us to be patient as we execute on this long-term strategy."

Acelity was formed in September 2014, when Kinetic Concepts, Inc. was combined with LifeCell Corp. and Systagenix Wound Management Ltd. Its devices division markets negative-pressure wound treatment, surgical and incision management, and epidermal grafting for patients suffering from traumatic, surgical or chronic wounds, such as diabetic foot ulcers.

The company also sells tissue matrices for a variety of reconstructive procedures, including post-mastectomy breast reconstruction and the reinforcement of abdominal wall defects. It employs about 5800 globally, according to the Business Journal.

Grand View Research named the other top tissue engineering firms as Medtronic, Zimmer Biomet, Acell, Athersys, Organogenesis, Stryker, Tissue Regenix Group, RTI Surgical, and ReproCell.

Acelity initially told the SEC that it had launched several restructuring and realignment efforts in the four years preceding the IPO registration, to reduce its overall cost base and improve efficiency. In 2014, it announced a business realignment plan to combine KCI, LifeCell, and Systagenix into one centrally managed operating company. The company operates under the Acelity brand with two business units, advanced wound therapy and regenerative medicine.

EP Vantage reported in August that VC funding and IPOs in medtech were both down for the first half of 2016. Only three medtech companies registered for IPOs on U.S. and European exchanges during that time period, the company said.

Nancy Crotti is a contributor to Qmed.

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[image courtesy of PIXABAY]