Tues
|
Valuation Ratios |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
|
annualizing Sept 9 mos |
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
|
Kips Bay Medical (KIPS) |
$147 |
None |
-11 |
6.5 |
6.6 |
|
BUSINESS |
|
. Development stage medical device company focused on developing, manufacturing and commercializing external saphenous vein support technology, or eSVS MESH, for use in coronary artery bypass grafting, or CABG, surgery.
. KIPS’s eSVS MESH is a mesh sleeve made of nitinol, an alloy of nickel and titanium, that, when placed over a saphenous vein graft during CABG surgery, is designed to improve the structural characteristics and long-term performance of the vein graft. |
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CLINICAL TRIALS |
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If the data from KIPS’ clinical trials is not adequate, KIPS may not proceed with the planned filing of applications for regulatory approvals in the United States or other major markets, or may be forced to delay these filings. |
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MARKET |
|
. The development and commercialization of medical devices to treat cardiovascular disease is a highly competitive industry. Physicians and patients may select among a variety of treatments to address coronary artery disease, including pharmaceutical therapy, balloon angioplasty, stenting with bare metal or drug-eluting stents, and CABG procedures, with the selection often depending upon the stage of the disease.
. According to the American Heart Association, in 2006, approximately 661,000 balloon angioplasty procedures were performed, with approximately 652,000 of these procedures involving the placement of one or more stents.
. The American Heart Association also reports that in 2006, approximately 253,000 patients received 448,000 bypass procedures. If physicians choose alternative treatments to CABG surgery due to the disadvantages of CABG surgery, such as the failure rate of CABG surgery, or if additional alternative treatments for cardiovascular disease are developed, there may be a decrease in the number of CABG surgery procedures.
. The American College of Cardiology/American Heart Association treatment guidelines state that CABG is the only recommended revascularization procedure for those patients with left main or three-vessel coronary disease. |
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BENEFITS |
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. KIPS’s eSVS MESH is designed to improve the structural characteristics and long-term performance of vein grafts in CABG surgery.
. If KIPS’s eSVS MESH is proven to do so successfully, KIPS believes physicians may more frequently choose to perform CABG surgery over alternative treatments. |
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COMPETITION |
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KIPS expects the primary competition for the eSVS MESH to be other products or techniques to improve the effectiveness of vein grafts in CABG surgery. KIPS is aware of two companies that have developed mesh devices to be used on the outside of blood vessels.
. Alpha Research, a Swiss company, has developed a product known as the Biocompound Graft for use in coronary and peripheral bypass operations. The product is a stainless steel braided mesh, indicated for use in coronary or peripheral bypass with patients who have irregularly shaped veins.
. B. Braun, a German company, has developed a product known as ProVena for use in peripheral bypass operations. The product is a woven polymer mesh, indicated for use in peripheral artery bypass operations using vein grafts. |
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KIPS believe that those two products are not currently direct competitors to eSVS MESH, and are not likely to become direct competitors in the near future, because the Biocompound Graft is intended for use only with irregularly shaped veins and the ProVena is intended for use with non-coronary procedures. |
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INTELLECTUAL PROPERTY |
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As of December 31, 2010 had six patent applications pending in the United States and nine patent applications pending in countries outside the United States |
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USE OF PROCEEDS |
|
$21mm |
|
. $7.0 to 10.0 million to fund the process of seeking regulatory approval to market eSVS MESH in the United States and abroad, including human clinical trials in the United States;
. $3.0 million to fund the development and testing of additional applications of eSVS MESH
. $5.0 million to fund certain milestone payments payable to Medtronic, Inc. for the acquisition of certain intellectual property rights to eSVS MESH
. Remainder for working capital and general corporate purposes, including commercialization activities for eSVS MESH in select European and other international markets and for the purchase of capital equipment and expansion of facilities |
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Kips Bay Medical |
KIPS, C, 5 |
|
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|
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Post IPO shares: 16.3mm |
|
Medical devices |
|
|
|
|
|
|
|
Minneapolis MN |
|
2008 |
2009 |
Sept9mos09 |
Sept9mos10 |
IPO Mkt |
|
Net income (loss) |
|
-$4 |
-$3 |
-$3 |
-$10 |
Cap (mm) |
|
|
|
|
|
|
$147 |
|
|
|
|
|
|
@$9 |
|
Valuation Ratios |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
annualizing Sept 9 mos |
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
Kips Bay Medical (KIPS) |
$147 |
none |
-11 |
6.5 |
6.6 |
17% |
|
SCORECARD |
|
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
1-5, 5 is high |
|
|
Growth |
mination |
tary |
rating |
|
20 is perfect |
|
2 |
2 |
0 |
1 |
5 |
|
