Biopsys Hopes Public Still Bullish on O.C. Entries

Biopsys Medical Inc., touting a less-invasive method of diagnosing breast cancer, hopes to become the latest Orange County firm to cash in on the hot market for companies that are going public.

The Irvine maker of a needle-like probe for breast tissue biopsies said it hopes to raise as much as $33.75 million when it issues 2.25 million shares of stock in its initial public offering, according to documents filed Tuesday with the Securities and Exchange Commission.

No date has been set yet for the first day of trading on the Nasdaq market system.

Biopsys is one of a growing number of Orange County companies in recent months to unveil plans to go public.

Six recent local public offerings have been well received. Sunglass maker Oakley Inc. saw its stock price jump 18% on its first day of trading. The price of Sync Research Inc. shares more than doubled on its first day of public trading. Apparel maker Mossimo Inc. and Boyd’s Wheels, a maker of car and motorcycle wheels, were among more recent IPOs to enjoy big first-day outings.

Analysts said the Biopsys decision to become publicly held further indicates how hot the market has become. Some medical industry executives are speeding up plans to go public by 12 to 18 months, said David Anast, publisher of Biomedical Market Newsletter in Costa Mesa.

“They might not have really considered it, but the last several months have been so extraordinary that it has definitely gotten their attention,” Anast said. He described the trend as the “stampede herd effect.”

“There are an awful lot of companies in registration right now, especially medical device companies and biotech in general,” said Satomi Degami, a financial consultant with Recombinant Capital in San Francisco.

Biopsys said it expects an offering price of between $13 and $15 per share, which Anast called a “pretty aggressive” starting point.

“I would have thought more in the $5 to $10 range, but that’s probably an indication of the strength of the IPO market now,” he said, noting that initial stock prices have seemed to be climbing.

In March, nearly 100 companies nationwide filed with the SEC to go public with the hope of raising a total of $3.6 billion.

Biopsys’ jump onto the IPO bandwagon comes nearly a year after the U.S. Food and Drug Administration approved the sale of its main product, the Mamotome Biopsy System. The company bills the product, which it started selling in August, as a less-invasive alternative to open surgical biopsy.

“Women’s health areas, such as breast cancer biopsy products, for better or worse, represent a growth industry,” Anast said. “Any product involved in the diagnostic procedures, especially involving breast or uterine cancer, are emerging as strong medical industry growth sectors.”

Degami said the biotechnology market was down in 1994 and began rising in the second quarter of 1995.

“It just keeps rising,” Degami said. “A lot of companies were running out of resources, the market picked up [and] the sector . . . went crazy. I just can’t tell you how much longer it’s going to last. I’m surprised to see it is lasting as long as it has.”

Investment bankers Robertson, Stephens & Co and Piper Jaffray Inc. will underwrite Biopsys’ offering. Proceeds from the sale will be used to increase manufacturing capabilities, fund research and development and expand sales and marketing.

Securities cannot be sold or offers to buy accepted until the registration statement filed with the SEC becomes effective.