Stanford University spinout iRhythm, which had raised a total of $115.5m in equity and debt, has gone public in a $107m initial public offering.
Stanford University spinout iRhythm Technologies, a developer of arrhythmia diagnostics technology, went public on Nasdaq on Thursday in an initial public offering that valued the company at $107m.
The flotation exceeded expectations, as iRhythm had initially set the range for 5.35 million shares at $13 to $15 – which would have meant a $75m IPO – but ended up pricing 6.3 million shares at $17. It opened at $26.75 on the first day of trading, briefly rose to $28, but by close on Friday had dropped slightly to $25.79.
iRhythm was spun out of the Stanford Byers Centre for Biodesign in 2006, becoming the seventh project to do so.
The company is commercialising the Zio Service, a long-term continuous monitoring system that combines a wearable biosensor with patient data and analytics tools to provide data to medical staff about people with cardiac arrhythmia.
The condition results in a heartbeat that is too fast, too slow or irregular and, while often harmless, can be life threatening as restricted blood flow may damage the brain, organs or the heart itself.
The proceeds from iRhythm’s flotation will go towards research and development, increased sales and operational activities, and may also be used for clinical trials and international expansion.
The spinout raised a total of $112m in equity funding and a further $3.5m in debt financing ahead of its IPO. Shareholders include pharmaceutical firm Novo, which led a $28.5m series E round in May 2015, as well as Kaiser Permanente Ventures, the investment vehicle of the care provider, and medical device manufacturer St Jude Medical.
Venture capital firms Norwest Venture Partners, Synergy Life Sciences Partners, New Leaf Ventures and Mohr Davidow have also backed the company.
The spinout’s flotation is another sign that the US IPO market is slowly recovering. In the third quarter of 2016 there have been 10 IPOs, up from five the previous quarter.
Other companies that have gone public this year include messaging app developer Line, enterprise cloud company Nutanix, gastric balloon developer Obalon and memory technology producer Everspin Technologies.
JPMorgan and Morgan Stanley acted as joint book-running managers for iRhythm’s flotation, while Canaccord Genuity and BTIG were co-managers. The underwriters have a 30-day option to buy an additional 944,000 shares, which could boost the IPO to $123m.
