Medical device company TranS1 is moving forward with plans to raise up to $20.1 million through a stock offering.
The Wilmington, North Carolina-based company today priced its offering of 6.2 million shares at $3.25 per share, a 12 percent discount from the stock’s previous closing price of $3.70. But in midday trading, TranS1 stock was selling at an even steeper discount — roughly $3 per share. The stock offering is expected to close on Sept. 26. This offering follows the May filing of a shelf-registration statement in which TranS1 said it could seek up to $50 million at some point in the future.
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TranS1 focuses on surgical devices that address degenerative spinal conditions that affect the lower lumbar region. The company said in securities filings that it will use net proceeds from the offering to finance additional clinical trials. The company will also work to secure insurance company reimbursement for its devices, hire additional sales personnel and finance research and product development activities.
TranS1 received 510(k) clearance from the U.S. Food and Drug Administration in 2004 for its first product, which launched commercially in 2005. The company has since received U.S. and European clearance on additional products. The company said that through the end of 2010, more than 11,000 spinal fusion procedures were performed globally with TranS1 products. TranS1 reported a 2010 net loss of $19.5 million on revenue of $26.2 million. Third-party reimbursement remains a hurdle for the company; in filings, TranS1 notes that its medical devices are in a category considered “investigational” or “experimental,” which may not be reimbursed by insurance.
