If you’re looking for an exciting new issue, look no further than the upcoming Penumbra Inc. IPO.
The company produces medical devices which focus on vascular and neurological issues, and is aiming to raise $122.4 million at a share price of approximately $28.00. (Source: NASDAQ, last accessed September 15, 2015.)
Based out of Alameda, California, Penumbra is a small company but turns a good profit in an emerging field with extremely high upside potential. The cutting-edge medical devices they produce are increasingly relied upon by healthcare providers to better treat patients.
With its particular focus on vascular treatments, and a new and improved device aimed at reducing the chance of stroke, Penumbra has solid offerings which will help propel it forward.
Though some detractors will point at the company’s small size as a liability, the reality is that it lends Penumbra flexibility in its strategic choices and is thus a strength.
Many upcoming IPOs in biomedicine are drug companies, but the Penumbra IPO offers something different. The company’s development of surgical access devices intended for vascular system treatment doesn’t just have potential, as with a new drug, but is already a product used by medical professionals.
According to its SEC filing, the Penumbra IPO price will involve approximately 4.4 million shares at an average price of between $25.00 and $28.00 a share. (Source: SEC, last accessed September 15, 2015.)
While this may seem steep for a small company’s IPO, a short glance at the company’s financial sheet eliminates that doubt. Penumbra is a small-yet-growing company with a solid record of producing profits, all within a field which has seen explosive growth in recent years. Growth in the biomedical field is also predicted to continue this trend into the long-term.
In contrast with many other companies looking to raise capital through an IPO, Penumbra is currently profitable. A great many companies that file for an IPO have high potential but are in massive debt, and are looking to leverage their potential in order to eliminate that debt through selling shares.
Penumbra recorded a $2.2 million profit in 2014 from revenue of $125.5 million. (Source: Yahoo Finance, last accessed September 15, 2015.)
In the half-year leading up to June 30, 2015, the company posted $81.3 million in revenue, and $57.6 million in the same period in 2014.
Penumbra was granted FDA clearance in May 2015 for its ACE64 aspiration thrombectomy device, a miniature device that removes blood clots. (Source: Penumbra, last accessed September 15, 2015.) This is a critical breakthrough in battling strokes.
If you’re still not convinced, consider the following: there were only two companies that make medical devices that filed for IPOs in 2013, but Penumbra is already the eighth in 2015 alone.
Translation: the industry in which Penumbra operates is growing at an exponential rate.
An additional advantage Penumbra enjoys is that developing and testing a medical device is nowhere near as expensive or time-consuming to develop as a drug. Indeed, the market for medical devices is forecasted to have a value of $133 billion by 2016.
Penumbra’s IPO date is September 18, 2015. Be sure to keep an eye on this company.