San Diego's CryoCor Raises $41 Million in IPO
Posted on: Saturday, 16 July 2005, 00:00 CDT
Jul. 15--CryoCor, a San Diego company that has developed a medical device that uses extreme cold to treat heart arrhythmias, yesterday raised about $41 million in an initial public offering.
The medical device company priced 3.7 million shares at $11, at the bottom of its anticipated range. Previously, CryoCor had planned to offer the shares in the $10 to $14 range, then changed the estimate again to between $11 and $13.
CryoCor said it will use the money to conduct clinical trials to support approval for its so-called cryoablation device in the United States. CryoCor received approval in Europe for the technology in 2002, but has had limited sales.
Shares of CryoCor fell below the offering price on its first day of trading, losing 13 cents to close at $10.87.
The company is seeking approval to market the device to treat atrial fibrillation and atrial flutter, two common but hard-to-treat cardiac arrhythmias.
Arrhythmias are heart rate and rhythm disorders that cause the heart to pump blood less efficiently and can lead to severe incidents such as stroke.
The company's technology uses a catheter-based device that freezes cells associated with arrhythmias. CryoCor said its system may reduce complications, such as blood clots, associated with similar procedures that use heat-based energy sources to destroy cells.
CryoCor is conducting patient studies with the aim of seeking approval for the device for the treatment of atrial fibrillation in the second half of 2006, and approval for the treatment of atrial flutter in 2007.
The money-losing company was founded in 2000, and has accumulated a deficit of $50.2 million. Last year, CryoCor posted a loss of $15.8 million. Prior to the public offering, CryoCor had $5 million in cash.
If CryoCor wins approval for its device as a treatment for arrhythmias, it will face competition from standard treatments, such as prescription drugs, surgical procedures and the off-label use of currently available catheter-based ablation devices, the company said.
CryoCor cautioned in regulatory filings that it hired outside counsel to investigate claims by a former executive that there were "irregularities and improprieties" in the company's clinical trials and FDA compliance process.
In April, the outside counsel reported that it had found no specific evidence of fraud, lack of of data credibility, or false or misleading information provided to the FDA, the company said.
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Source: The San Diego Union-Tribune
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