"Bionic eye" maker Second Sight Medical sets terms for $32 million IPO

Second Sight Medical Products, which markets camera-based retinal implants that restore some vision to the blind, filed and set terms for its IPO on Tuesday. The Sylmar, CA-based company plans to raise $32 million by offering 3.5 million shares at $9.00 per share. At the proposed price, Second Sight would command a fully diluted market value of $326 million.

The company's devices provide electrical stimulation of the retina to induce visual perception in blind individuals. The device is comprised of both an implantable "bionic eye" and a pair of glasses with an attached camera. The user is able to "see" patterns of light when a computer video processor transmits data to the implant. The device is currently only approved for individuals with retinitis pigmentosa, a hereditary eye disease that can cause blindness and affects an estimated 1.5 million people worldwide and 100,000 in the US.

To date, Second Sight has installed 90 units. Its immediate strategy will be to gain regulatory approval for its device in additional countries, such as Canada and Turkey. However, the company anticipates beginning clinical studies in the 2H14 for to apply the device for the treatment of age-related macular degeneration ( AMD ), which affects between 20 and 25 million people worldwide. It hopes to have regulatory approval for this device in 2019. Three biotechs with wet-AMD indications recently IPO'd, including Pfenex ( PFNX ), Ocular Therapeutix ( OCUL ) and Avalanche Biotechnologies ( AAVL ).

To encourage long-term investing, each share of common stock will be coupled with a non-transferable right to obtain one additional share, at no cost, two years from the IPO. Primary shareholders include co-founder and Chairman Alfred Mann (33% post-IPO stake), Williams International (18%), Versant Ventures (13%) and CEO Robert Greenberg (3%). Alfred Mann is also the CEO of MannKind ( MNKD ).

Revenue increased 45% to $657,000 for the three months ended March 31, 2014. Its gross loss narrowed from $1.4 million to just $70,000. However, Second Sight more than doubled its marketing spend and increased personnel, so its loss from operations narrowed 10% to $4.5 million.

Second Sight Medical Products, which was founded in 1998 and booked $2 million in sales for the 12 months ended March 31, 2014, plans to list on the NASDAQ under the symbol EYES. MDB Capital Group is the sole bookrunner on the deal. No pricing date was disclosed, but the IPO could occur in September at the earliest.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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