Public pain prevention: Nevro sets terms for $100 million IPO

Nevro, which is awaiting approval for a spinal cord stimulation device that treats leg and back pain, announced terms for its IPO on Monday. The Menlo Park, CA-based company plans to raise $100 million by offering 6.3 million shares at a price range of $15 to $17. At the midpoint of the proposed range, Nevro would command a fully diluted market value of $401 million.

Business
Nevro has developed an implantable spinal cord stimulation (SCS) system that treats chronic pain in the back and legs. The company notes that currently-approved SCS treatments, which are reimbursable, have limited efficacy for back pain. Its Senza device has been available in European markets since 2010 and Australia since 2010. It submitted a PMA to the FDA in June 2014, and is preparing to launch its device as early as the 1H16, if approved.

Shareholders
Primary shareholders include Johnson & Johnson (14% post-IPO stake), Novo A/S (13%), Bay City Capital (10%), Three Arch Partners (10%), New Enterprise Associates (8%), Accuitive Medical Ventures (7%) and Aberdare Ventures (7%). Insiders intend to purchase $25 million worth of shares on the offering (25% of the deal at the midpoint).

Competition and similar IPOs on file
Nevro cites Boston Scientific, St. Jude Medical and Medtronic as its key competitors, each of which have approved neuromodulation systems. Two clinical-stage neurostimulation device makers with different indications, NeuroSigma (NSIG) and EndoStim (STIM), planned to price IPOs in October but postponed.

Nevro, which was founded in 2006 and booked $27 million in sales for the 12 months ended June 30, 2014, plans to list on the NYSE under the symbol NVRO. J.P. Morgan and Morgan Stanley are the joint bookrunners on the deal. It is expected to price during the week of November 3, 2014.