Restore Medical files for $50 million IPO

By Ted A. Knutson

Washington, March 13 - Restore Medical, Inc. filed for a $50 million initial public offering in an S-1 filing with the Securities and Exchange Commission.

The St. Paul, Minn.-based biotechnology company makes the Pillar palatal implant system, a simple, minimally-invasive, implantable medical device to treat sleep disordered breathing, which includes obstructive sleep apnea, or OSA, and snoring.

When inserting a Pillar, a physician implants three small, braided, proprietary polyester inserts into the muscle of the soft palate to stiffen it and add structural support. This stiffening minimizes or eliminates the palatal tissue vibration that can cause snoring and the collapse that can obstruct the upper airway and cause OSA.

The company said the Pillar Procedure is a safe, clinically effective, long-lasting, low-risk procedure with minimal pain or complications that offers significant benefits to both patients and physicians over other available treatment options for mild to moderate OSA and snoring.

The Journal of the American Medical Association estimates that one in five adults, or about 44 million people, in the United States suffers from mild OSA, and that one in 15 adults, or about 15 million people, in the United States suffers from moderate or more severe OSA. Internationally, the total number of people with OSA is estimated to exceed that in the United States, including about 20 million people in Western Europe, 57 million people in China and 47 million people in India.

Restore had an operating loss of $6.58 million on sales of $4.85 million for 2005 against an operating loss of $8.32 million on sales of $945,000 for 2004.

MPM Capital is the largest shareholder with 3.98 million shares for a 37.9% stake.

Deutsche Bank Securities is the book-running manager with participation from RBC Capital Markets, the co-lead manager, and First Albany Capital.

The company ntends to apply to have its common stock quoted on the Nasdaq National Market under the symbol "REST."

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