Imagyn Medical Nearing Its First Public Stock Offer
Medical device maker Imagyn Medical Inc., more than a year late with its plans to go public, will try to cash in on the hot market for initial public offerings.
Imagyn plans to issue 2.5 million shares to raise up to $32.4 million, according to documents it filed with the Securities and Exchange Commission. The company said three years ago that it hoped to go public by the end of 1994.
Imagyn’s chairman, Franklin D. Brown, declined to comment.
The initial price was set at $11 to $13 a share. A final price won’t be set until after the SEC declares the offering effective, probably in about two months.
Across the nation and locally, investors have flocked to stocks in companies as diverse as high-tech juggernauts, sunglass maker Oakley Inc. in Irvine and Stanton-based Boyds Wheels, which makes car and motorcycle wheels.
Top prices have gone to high-tech companies, both in the computer and medical industries. And Imagyn appears to have the products that could take advantage of Wall Street’s appetite, analysts said.
Imagyn makes specialized catheters and other products that give doctors a less invasive and less costly method of viewing the inside of a woman’s reproductive system. The products can detect problems and help correct them.
The products include a micro-laparoscope--a viewing tube--that is one-fifth the size of standard laparoscopes. It can be inserted through a catheter to transmit images of the inside of the uterus or Fallopian tubes to a monitor. In addition, the device requires no incision or general anesthesia.
“It becomes less invasive and a little safer,” said Dr. Mark Surrey, director of reproductive surgery at Cedars Sinai Medical Center in Los Angeles. “You can use a local anesthetic, and take it out of hospital and use it in the doctor’s office.”
The process also is less costly. Imagyn figures its procedure would cost about $2,000 while the expense of the routine hospital procedure reaches $30,000.
Surrey, who conducted clinical trials of Imagyn’s products at Cedars Sinai, said the company doesn’t have a clear field. Two other companies have similar products and other companies are testing devices.
Even so, Imagyn should see great interest in its stock, said David Anast, publisher of Biomedical Market Newsletter in Costa Mesa.
“It’s a wonderful time to go public, especially for companies with hot high-tech products like micro-laparoscopic instruments and equipment,” he said. Imagyn, he said, is in an industry that has shown financial strength and “demonstrable” growth. “It can only get better,” Anast said.
Founded in 1989, the company has spent much of its effort on research and development. It raised $22.5 million mainly from six venture capital companies that hold a 70% stake in the company. The additional shares in the offering would reduce their stake to 46%.
Over the last five years, the company has lost a total of $18.5 million on revenue of $5.5 million. Sales have grown steadily, though slowly, reaching $2.24 million last year. And the red ink appeared to peak with a $5.3 million loss in 1994. Last year, the company lost $2.65 million.
In its initial public offering, Imagyn would give its Wall Street underwriters a monthlong option to buy an additional 375,000 shares. That could bring the total raised to $37.4 million.
The company would use $7 million to fund product introduction, build a sales and marketing organization, and develop and sponsor physician training programs. It would devote $5 million to research and development and an additional $1.5 million to capital equipment purchases.
Imagyn would pay $800,000 to its underwriters--Dillon, Read & Co. Inc. and Montgomery Securities--and use the remaining funds for working capital and general corporate purposes.
Once the sale is completed, the public will own 34.4% of the company’s 7.25 million shares outstanding, according to the SEC filing. The stock would trade on the Nasdaq market system.
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Imagyn Medical Inc. at a Glance
* Founded: 1989
* Headquarters: Laguna Niguel
* Business: Designs and develops devices for diagnosis and treatment of gynecological and reproductive disorders
* President/CEO: Franklin D. Brown
* Employees: 57
* 1995 net sales: $2.24 million
* 1995 net loss: $2.65 million
* Shares offered: 2.5 million at $11-$13 each
* Intended use of proceeds: Product introduction, sales and marketing, physician training program, research and development, capital expenditures, working capital and general purposes
* Proposed Nasdaq symbol: IGYN
Sources: Securities Exchange Commission; Researched by JANICE L. JONES / Los Angeles Times
Los Angeles Times
