TriVascular IPO a Winner in First Two Trading Days

Braving choppy initial public offering (IPO) seas in the medical device industry, Santa Rosa, CA-based TriVascular Technologies Inc. launched their stock issue the day after Tax Day and caught a bit of a tailwind.

At the closing bell on the first day of trading, the stock was up almost 15 percent at $13.79. It briefly touched the $16 mark intraday on its second day before closing at $14.32, better than a 19.3 percent gain.

The company's shares began trading on the NASDAQ Global Select Market on April 16 under the ticker symbol TRIV. When the IPO was first announced, we reported that the company hoped to raise $100 million. That works out to over $15 per share, which apparently was thought to be too optimistic as the actual IPO offering price was $12.

TriVacular makes the Ovation Prime abdominal stent graft system, a minimally invasive treatment for abdominal aortic aneurysms which, if left untreated, can rupture and cause internal bleeding and death. The company says the Ovation Prime is the lowest profile system approved by FDA, and is available in sizes down to 13Fr. Further, it uses a novel, polymer-based sealing mechanism. Ovation Prime has more flexibility to make its way through the femoral artery, the company says. The new device also has more markers that show up in imaging to help doctors better position the device in the body.

TriVascular received CE Mark approval for its original Ovation system in September 2010. FDA approval followed in October 2012. The company's newest product, the Ovation Prime system, was approved by FDA in January 2013.

According to TriVascular's prospectus, it a net loss of $50.3 million last year on revenues of $19.5 million and had a deficit of $238.5 million. Cash and equivalents totaled $38.1 million.

Robert Digitale, writing for the Santa Rosa Press Democrat, said, "The company plans to use about $4.6 million from the IPO to pay off a note to Boston Scientific, which purchased the company in 2005 and then closed it the following year in a cost-cutting move. The company reopened in 2008 after investors raised $65 million to buy out Boston Scientific."

TriVascular's brisk launch may signal the beginning of a wave of medtech startups. According to the Med Tech Startup Blog, "Investors are starting to see that the medical device IPOs are meaningful as the medical devices target some unmet clinical needs." The blogger predicts that "2014 to 2017 will see the new highs in the medical device IPOs, acquisitions" space.

Stephen Levy is a contributor to Qmed and MPMN.