Penumbra, one of California’s largest independent medical device companies, hits the public markets today with the hopes of raising $120 million on shares priced at $30 apiece.
The company wants the fresh capital to advance its efforts into two large growing medical areas: neurovascular and peripheral vascular markets, currently with a large focus on helping stroke victims and looking at preventive measures.
With this IPO news, and with some commentary on the market in general, Penumbra’s CEO Adam Elsesser shared some insights with MedCity News on what going public means for the company and what’s next.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
How would you describe the environment for medical device IPOs right now? Why are we seeing so many this year?
I certainly can speak to us and why we’re doing it this year, and that comes down to the logical point in our history. We never took venture capital money.
We had an ambition as a company to really grow a sustainable medical device company that tried to accelerate its ability to innovate as we grew and have been doing it for a full decade. We’ve built a strong platform with over a thousand employees. This is really the right time in the company’s history to take on some initial capital and the benefits of being a public company in the field we’re in.
A lot of people look at IPOs as an exit, but because we don’t have venture capitalists, we look at this as a beginning of the next phase — the next decade plus of the company’s growth and evolution.
In terms of the industry environment, what do you think will be or is different for early stage medical device companies that you didn’t need to encounter from the start?
I don’t think there’s been a fundamental shift. I think if you hear some of my colleagues who run startups, there’s always been a challenge to raise venture capital money and keep going to fruition.
I think at the core, the fundamental premise remains the same: If you start a company with a clear vision as to what you’re trying to accomplish, and if you’re fortunate enough to have the ability through great engineering to actually satisfy that vision, you’re going to be in pretty good shape.
Can you talk about some of the post-IPO initiatives?
We’re focused on a number of our key markets. We are involved and have been one of the pioneers in the treatment acute ischemic stroke. The next phase is very exciting.
Earlier this year the MR CLEAN study was published that was a study showing intra-arterial thrombectomy treatment was beneficial to the subset of patients that we’re focused on, and it really became a watershed moment in identifying the signs of strokes early and treatment of stroke.
These are exciting moments and rare in medical history. We’re right in the center of that and it’s an entirely gratifying and exciting time. Right after the IPO, we will get back to work.
What would success for Penumbra look like at the end of 2016?
Obviously we understand that our public investors will look at certain metrics, and we’ve discussed those metrics, but more importantly are we successful at continuing with the areas we’ve mentioned and also are able to continue to innovate in new areas.
One of the key things: The foundation we’ve built has been very purposeful. We’ve built a culture on the idea of cooperation and empowering everyone — young engineers who are not afraid to take big risks and fail because if you’re focused on innovation, and that word is used an awful lot, you have to remember that it’s more core basis means doing something that’s never been done before.
If you’re going to have that as a core of your company, you have to make sure everyone feels that way and is empowered to take that risk.
What do you think you need to prove to investors, over the long-run, in order to be successful? For example, what would you consider to be a winning profit margin down the road?
Most importantly, at its core, what our investor base understands is the foundation that the numbers built — the core competency of culture and the capacity to run a profitable business. Those are the things I think have really set us apart from other companies. For that I’m delighted and honored, they have understood what we have tried to accomplish for the last eight years.
In the next ten years, if we keep doing what we’re doing, we will accelerate our ability to innovate.
Photo: Flickr user Simon Cunningham
