Australia is consolidating its position as the market of choice for smaller US medical device companies to go public, with another company, Visioneering Technologies, finalising an initial public offering.
Visioneering makes disposable contact lenses and is targeting markets worth at least $US3.4 billion among adults and $US2 billion-a-year among children.
![Contact lens breakthrough could improve clinical performance, while reducing optometrists' time.](/web/20170224205915im_/http://www.smh.com.au/content/dam/images/1/m/u/k/b/z/image.related.articleLeadwide.620x349.gufbyj.png/1487465916039.jpg)
It will join Reva Medical and AirXpanders, US companies that came to local markets for funds, while Sirtex and Osprey Medical and a host of others have used developed technology to build positions in the key US market.
Visioneering is seeking to raise $US33 million ($43 million) via a sharemarket float little more than six months after it completed a pre-IPO funding round of a little more than $US10 million from Australian investors to help it ramp up sales in the US.
"The Australian market has an appetite for medical devices which have been FDA-cleared, so with market-risk removed, and with people ready to buy the product," the company's chief executive Dr Stephen Snowdy said. "Canaccord [the underwriter] convinced us there is an appetite in Australia for deals of that profile."
The US may have the deepest venture capital markets in the world, but the small size of the Visioneering raising and also its present level of sales as it begins the product launch, meant that financial markets there were effectively closed to it.
The largest shareholders in the company are US-based venture capital investors Charter Life Sciences and Memphis Biomed Ventures, while locally, Regal Funds Management has a large holding, and it is believed to have taken the opportunity of the public share issue to top up its holding.
All of the funds raised from the IPO will be re-invested in the business, with the planned ASX-listing taking to more than $US60 million the total invested in getting its product to market. Approvals are already in place to launch in the US, for example, with initial sales already under way.
The raising in the second half of 2016 was to help boost the group's supply infrastructure following an initial surge in demand as the company began to step up its marketing activities in the key US market. Funds raised through the public offering will enable a nine-fold lift to 45 in the number of sales representatives in the first year after listing, for example.
Its product is a multi-focal lens, handling both far and near vision as well as normal distances, giving it a marked advantage over competing products. Additionally, it typically takes less than two sittings, on average, with an optometrist which is less than half that of rival products, which is a significant advantage for the medical practitioner.
"Clinical performance and clinician time" are key advantages of his product, Dr Snowdy said. "Also existing products don't solve near vision issues and it is much more efficient for the optometrist."
Internationally, the Asian market is a focus given the prevalence of short-sightedness among children as it prepares to seek regulatory approvals to sell into the European and Australian markets, both of which are anticipated during the second half. The advantage of Visioneering's product is its ability to correct short-sightedness among children, since the condition has been linked to elevated risk for some diseases as they age.
Dr Snowdy said it intends using third-party distributors for all other markets outside of the US.
"The raising should get us to operational break-even," he said. "Any future raising would only be for inventory build-up."
New investors would account for 37.8 per cent of the company, once listed, with Canaccord Genuity the lead manager and underwriter.