NxStage Medical files for $75 million IPO

By Ted A. Knutson

Washington, July 19 - NxStage Medical, Inc. filed for a projected $75 million gross proceeds initial public offering of common stock in an S-1 filing with the Securities and Exchange Commission.

Merrill Lynch & Co. is the lead underwriter. The other underwriters are Thomas Weisel Partners LLC, William Blair & Co., and JMP Securities.

The Lawrence, Mass.-based company develops and makes systems for the treatment of end-stage renal disease, or ESRD, and acute kidney failure.

ESRD, which affects about 431,000 people in the United States, is an irreversible, life-threatening loss of kidney function that is treated predominantly with dialysis.

NxStage's primary product, the NxStage System One, is a small, portable, easy-to-use hem dialysis system designed to provide physicians and patients improved flexibility in how hem dialysis therapy is prescribed and delivered. As of June 30, 141 ESRD patients were using the System One.

ESRD is found most often in the elderly population, so Medicare is an important potential source of NxStage's revenue.

However, the Centers for Medicare and Medicaid Services limits the number of treatments paid for by Medicare to three times a week, unless there is medical justification for additional treatments while most patients using the System One in the home treat themselves up to six times per week.

"To the extent that Medicare contractors elect not to pay for the additional treatments, adoption of the System One may be slowed," the IPO prospectus says.

IPO proceeds will be used for working capital, to expand manufacturing and for general corporate purposes.

The company lost $14.84 million on revenues of $1.88 million in 2004.

The Sprout Group holds 6.98 million pre-IPO shares for 36.5% of the existing common shares. Atlas Ventures holds 3.29 million shares for 17.3% of the total.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.