IPO Report: Medovex (MDVXU)

Francis Gaskins |

equities.com, Medovex IPO, medical device products, stockMedovex (MDVXU) intends to build a portfolio of medical device products in areas where its world-class management team believes the largest, most targetable market opportunities exist.  It is based in Atlanta, GA.

Four other companies are scheduled for the week of Dec. 15, 2014. The full IPO calendar is available at IPOpremium.

Manager, Joint-managers: Laidlaw & Company (UK) Ltd.

MDVXU scheduled an $8 million IPO with a market capitalization of $55 million at a price range midpoint of $5.75 for Friday, Dec. 19, 2014 on Nasdaq. SEC Documents

Medovex IPO Overview

MDVXU intends to build a portfolio of medical device products in areas where its world-class management team believes the largest, most targetable market opportunities exist. 

MDVXU intends to build a portfolio primarily by acquiring companies or technologies that MDVXU believes have promising commercial potential.

Medovex Valuation

Glossary
Pre-IPO grade-score summary

Many IPOs in today’s environment are graded C+ and scored 7.

If the pre-IPO grade is below C+ or the score is below 7,

then our analysts may have some concerns about the company’s outlook and/or its market segment.

If the pre-ipo grade is above C+ or the score is above 7, then our analysts believe the company’s overall business outlook is very favorable.

C = unprofitable, C+ = profitable

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing Sept 9 mos

         

Medovex (MDVXU)

$53

no rev

-22.0

6.6

7.0

15%

 

 

 

 

 

 

 

Medovex IPO: Conclusion

Neutral minus, C, 5

Nothing in development

No pre-clinical trials scheduled

Needs strategic partners to move forward

6.6 times book (this is high)

Tiny IPO, $53mm market cap

1 share of stock & one warrant exercisable at 120% of IPO price

Medovex Business

MDVXU intends to build a portfolio of medical device products in areas where its world-class management team believes the largest, most targetable market opportunities exist. 

MDVXU intends to build a portfolio primarily by acquiring companies or technologies that MDVXU believes have promising commercial potential.

In September 2013, MDVXU acquired Debride, Inc. (Debride). 

Debride is a development stage company that has acquired a patent, patent applications and other intellectual property rights relating to the use, development, and commercialization of the DenerVex Device (the DenerVex). 

Debride acquired from Scott M.W. Haufe, MD (Dr. Haufe) all right, title and ownership of U.S. Patent 8,167,879 B2, together with all of Dr. Haufe’s rights, title and interest in and to the DenerVex. 

Dr. Haufe is a director of the Company. 

Medovex Clinical trials

"We do not have (and do not expect to develop) the independent ability to independently conduct pre-clinical and clinical trials for our products and to the extent we will need to conduct such trials, we will likely need to rely on third-parties, such as contract research organizations, medical institutions, clinical investigators and contract laboratories to conduct such trials."  Source: page 12  of the SEC filing

Medovex Co-Development Agreement

In September 2013, MDVXU entered into a Co-Development Agreement with Dr. James Andrews, a renowned orthopedic surgeon who also is a director of the Company. 

Dr. Andrews has agreed to evaluate the DenerVex and to seek to make modifications and improvements to such technology, as well as to strategize in the rollout of the DenerVex. 

To date, MDVXU’sefforts have focused on the development of the patent-protected DenerVex device (U.S. Patent 8,167,879 B2). 

The DenerVex is designed to provide long lasting relief of pain associated with Facet Joint Syndrome (FJS), a condition in which the joints in the back of the spine degenerate and subsequently cause back pain.

The concept is simple: remove the affected nerve endings sending pain signals to the brain in such a way that they won’t grow back.

A current treatment for this pain removes the nerve endings, but the nerve endings regenerate and the pain returns. A patient is forced to return again and again to seek pain relief at a substantial cost over time.

In order to avoid having his patients suffering from chronic back pain associated with FJS have to return to him for repeated treatments,  Dr. Haufe performed a 2-step procedure where he first scraped away synovial tissue using an already available deburring device around the facet joints in the spine so nerves would not have tissue that could be used for regrowth.

Once this tissue was removed, he then used a standard electrocautery unit to cauterize the nerve endings, as is done with the temporary treatment to render the nerves incapable of sending pain signals to the brain.

Due to the complexity and time required to complete this procedure, it is only employed by a small number of other surgeons besides Dr. Haufe. 

Dr. Haufe did not use the prototype of the DenerVex device to perform such procedures.

Medovex Intellectual property

Currently, MDVXU’sintellectual property rights at present consist of the Contributed Intellectual Property, which includes the Patent.

The Patent was originally filed in 2007 and was issued on May 1, 2012. MDVXU intends to leverage the Patent to the fullest extent possible through market development and prosecution of its rights under the Patent.

In addition to filing and prosecuting patent applications in the United States, MDVXU intends to file counterpart patent applications in Europe, Canada, Japan, Australia and China in additional countries where MDVXU thinks such foreign filing is warranted.

Medovex Competition

MDVXU is aware of several companies that compete or are developing technologies in MDVXU’scurrent and future products areas. 

With regard to the DenerVex device, MDVXU believes that its principal competitors include RF ablation devices manufacturers Cosman and Stryker.

MDVXU may also face competition from cryodenervation device manufacturers, such as Spembly Medical Systems. 

MDVXU may also face competition from developing but potentially untested technologies such as as Zyga’s GLYDER device.

Medovex 5% shareholders pre-IPO

Scott M.W. Haufe, M.D., Director  10%

Renee Honig  7.4%

Jarrett Gorlin  7.2%

Steve Gorlin 5.4%

Medovex Dividends

No dividends are planned.

Medovex Use of proceeds

MDVXU expects to receive $8 million from its IPO and use it for the following:

$2,300,000 for a human clinical trial

$1,100,000 for product development (including production of sample units)

$890,000 for regulatory, reimbursement and other experts to obtain regulatory approvals and be ready to sell to and be paid by its target customers

$726,000 for general and administrative expenses

$1,894,000 for working capital and other general corporate purposes

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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