Sleeping disorders diagnosis company Itamar Medical Ltd. (TASE:ITMR), which is preparing for a public offering in the US, has raised $11.5 million in a private bridging placement. The company has announced its offering plans a number of times, but has yet to submit a public prospectus.
US investors led the round, including a fund managed by Deerfield Management, a large veteran investment company specializing in the life sciences, and funds Triple Gate Capital, West Elk Partners, and Alpha Capital. The Israeli investor in the round is More Investment House. Itamar Medical was advised by Cybele Investments, which handles capital market affairs for the company, including financing rounds.
The share price for the round was NIS 1.17, a 16% discount on the market price. A bridging round at such a discount is often used to recruit strong investors before a public offering, and to make sure that the company embarks on the offering with a full treasury. The addition of more investors before a public offering is possible. Itamar Medical's share price was down 1.3% today, pushing its market cap down to NIS 391 million.
Completion of the bridging round requires approval from the US Securities and Exchange Commission (SEC), because the US investors received ADS (American Depositary Shares), a US security that tracks a share on a foreign stock exchange, and the ADS will be registered in the US. The SEC is currently paralyzed by the US governmental shutdown, but the Israeli part of the round can be completed.
Itamar Medical has developed a system for home diagnosis of breathing disorders during sleep. The system is marketed mainly through cardiologists, because of the close connection between heart failure during sleep and metabolic syndrome (heart disease, obesity, and diabetes).
The main shareholders in Itamar Medical are Viola Ventures (25%), the MS Pace fund (14%), founders Dr. Giora Yaron (10%) and Martin Gerstel (5%), and Israeli investment institutions Yelin Lapidot (9%), Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) (7%), Meitav DS Investment House Ltd.) (5%), and The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) (5%). The company's CEO is Gilad Glick.
Itamar Medical's revenue totaled $6.1 million in the third quarter of 2018, 14.7% more than in the corresponding quarter in 2017. Revenue in the US, where the company is concentrating most of its efforts, amounted to $5 million. The usual threshold for medical devices companies to be of interest to the US capital market is $20 million in annual revenue.
Published by Globes, Israel business news - en.globes.co.il - on January 17, 2019
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