Virginia medical device startup K2M Group Holdings joined the list of area medical device and biotech startups with IPOs this year with a $120 million IPO planned on Thursday. Concerns over a tech stock bubble aside, biotech startups are doing pretty well in 2014 around here it seems.
K2M is based in Leesburg, Va., and has developed ways of treating spinal diseases with devices for minimally invasive surgery for about a decade. Going public at this point makes sense for the company, which has had a good record of success with the devices but unsurprisingly been posting losses thanks to the expense of development. The company posted a revenue of nearly $158 million, a loss of a little less than $38 million in the fiscal year. The money raised in the IPO will go into paying down some of that debt and expanding distribution for their products.
According to the announcement, K2M offered 8,825,000 shares to the public on the NASDAQ Global Select Market, priced at $15 each. The $120 million it planned to raise is actually a step up from when we originally reported the company's plan to go public. At that point K2M was looking at only $100 million for the IPO.
The product line is somewhat impressive. There are spinal deformity adjustments, spine stabilization devices and even ways to promote the growth of healthy spinal tissue for people with degenerative diseases that grow worse over time. To put in the devices, the company has also created a set of surgical tools that minimize the trauma of spinal surgery, which not surprisingly is very delicate work that can go wrong in a lot of ways. At this point the company has nearly 60 products sold in 27 countries.
Unlike most biotech companies that pick names to evoke the idea of medicine or biology, K2M is named after the K2 mountain, the second-highest in the world. Their products follow the geographic theme with names like Denali, Everest and Serengeti. It certainly makes it stand out in the often competitive medical device arena. And if the IPO goes as well as the company hopes, they may have to start finding new mountains to name all the products after.
Image Courtesy K2M
