NUVECTRA CORP (NVTR) SPO
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|Company Name||NUVECTRA CORP|
|Company Address||5830 GRANITE PKWY
PLANO, TX 75024
|CEO||Scott F. Drees|
|Employees (as of 2/23/2017)||181|
|State of Inc||DE|
|Fiscal Year End||12/31|
|Shares Over Alloted||0|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||3/14/2018|
We estimate that the net proceeds to us from our issuance and sale of shares of our common stock in this offering will be approximately $20.5 million, or approximately $23.6 million if the underwriters exercise their option to purchase additional shares in full, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering payable to us for general corporate purposes, which may include, among other things, funding for operations, research and development, capital expenditures, working capital, acceleration of the Company’s growth, expansion of the Company’s employee base and sales force, repayment or refinancing of indebtedness or payment of other corporate obligations, investments in a subsidiary and investments in existing or future projects. Pending their ultimate use, we intend to invest the net proceeds from this offering in marketable securities and short-term investments. The expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including our ability to gain access to additional financing. As a result, our management will have broad discretion in the application of the net proceeds from this offering, and investors will be relying on the judgment of our management regarding the application of the net proceeds from this offering.
The neuromodulation medical device industry is intensely competitive, subject to rapid change and highly sensitive to the introduction of new products and other market activities of industry participants. We currently compete in the SCS market for chronic pain. In the SCS market, the main competitors are Medtronic, Boston Scientific, St. Jude Medical and Nevro Corp. In addition, SCS therapy also competes against other potential therapies, including spinal surgeries, in particular spinal reoperation. All of the major medical device competitors in the SCS market have obtained United States and European Union regulatory approvals for their SCS systems and are expected to launch new products or release additional clinical evidence supporting their product therapies within the next few years. These major competitors are publicly-traded companies or divisions of publicly-traded companies, all of whom have significantly greater market share and resources than we have. In addition, these competitors also have more established operations, longer commercial histories and more extensive relationships with physicians than we have. Some of these competitors also have wider product offerings within neuromodulation and other medical device product categories. This may provide these competitors with greater negotiating power with customers and suppliers and with more opportunities to interact with the stakeholders involved in purchasing decisions. We believe the primary competitive factors in the neurostimulation market are: • Technological innovation, product enhancements and speed of innovation • Sales force experience and access • Ease of use • Product support and service • Clinical studies • Effective marketing and education • Pricing and reimbursement rates • Product reliability, safety and durability • Clinical research • Company brand recognition
We are a neurostimulation medical device company focused on the development and commercialization of our neurostimulation technology platform with a broad range of applications for the treatment of various disorders through stimulation of tissues associated with the nervous system. Our
neurostimulation technology platform has the capability to provide treatment to patients in several established and growing neurostimulation markets, including spinal cord stimulation, or SCS, sacral neuromodulation, or SNM, deep brain stimulation, or DBS, and other emerging neurostimulation markets. Following our spin-off from Integer Holdings Corporation, or Integer, we became an independent, publicly-traded company as of March 14, 2016. Prior to the spin-off, we were a wholly-owned subsidiary of Integer. Our Algovita™ SCS system, or Algovita, is the first application of our neurostimulation technology platform and is indicated for the treatment of chronic pain of the trunk and limbs. We believe Algovita brings to market a user friendly, robust and flexible design with a broad set of product capabilities and advanced technology and is well positioned to compete in and help grow the existing SCS market, currently estimated at approximately $2 billion globally. Algovita received premarket approval from the FDA in November 2015, and we commercially launched Algovita in the United States during the first half of 2016. In 2017, we filed regulatory submissions with FDA and CE Mark authorities for full-body MRI Conditional approval for Algovita. We currently anticipate full-body MRI Conditional approval in the second quarter of 2018 for CE Mark and in the fourth quarter of 2018 for the FDA. Over 1,000 implants of Algovita have been performed in the United States. Outside of the United States, Algovita obtained CE Mark approval in June 2014 and is indicated for the treatment of chronic intractable pain of the trunk or limbs. Algovita is reimbursable under existing SCS codes in the United States, the European Union and Australia, and has been commercially available to patients in Germany and several other European countries since November 2014. We have also developed our existing platform for use in the SNM market and have filed regulatory submissions with the FDA and CE Mark authorities in January 2017 and December 2016, respectively, for Virtis™, the Company’s SNM system for the treatment of urinary retention and the symptoms of overactive bladder. We expect Virtis to be the second entrant in the United States SNM market in 2018. In addition, in early 2016, as a partnering opportunity we entered into a strategic development agreement with Aleva Neurotherapeutics S.A., or Aleva. Through this agreement we are leveraging our neurostimulation technology platform to develop a DBS system for Aleva to treat Parkinson’s disease and Essential Tremor. This platform is still under development, and if we complete development of a DBS system for Aleva, we expect that Aleva will continue to commercialize the DBS system. During the third quarter of 2017, Aleva received additional financing and we extended this development agreement through 2018. Our NeuroNexus Technologies, Inc. subsidiary, or NeuroNexus, is the neuroscience and clinical research portion of our business. NeuroNexus works closely with researchers to develop and refine new tools that aid and advance neuroscience research. NeuroNexus designs, manufactures and sells neural interface systems including high quality, high density microelectrode arrays, custom designed probes, electrode instrumentation and accessories. In addition, the NeuroNexus team possesses years of neuroscience research experience to help facilitate successful research projects and provide insight to minimize known challenges. Certain of NeuroNexus’ technologies could be incorporated into our neurostimulation technology platform in the future. Our revenues include sales of neural interface technology, components and systems to the neuroscience and clinical markets, development and engineering service fees, and Algovita. We expect that our future revenues will come primarily from sales of neurostimulation medical device products, including Algovita, particularly as we continue our launch commercially in the United States, and Virtis™, the second application of our neurostimulation technology platform and our first product for the SNM market, and from time to time may also include technology licensing fees, development and engineering service fees, and royalty fees. --- Our principal executive offices are located at 5830 Granite Parkway, Suite 1100, Plano, Texas 75024, and our telephone number is (844) 727-7897. Our website address is www.nuvectramed.com.
|Auditor||Deloitte & Touche LLP|
|Company Counsel||Dorsey & Whitney LLP|
|Company Counsel||Melissa G. Beare|
|Lead Underwriter||Piper Jaffray & Co.|
|Transfer Agent||Computershare Trust Company, N.A|
|Underwriter||JMP Securities LLC|
|Underwriter||SunTrust Robinson Humphrey, Inc|
|Underwriter Counsel||O’Melveny & Myers LLP|
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