Outset Medical raises $277 million in Wall Street debut
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With the closing of its initial public offering of 10,293,777 shares of common stock last week, dialysis machine manufacturer Outset Medical Inc. has raised $277.9 million, the company announced.
Traded as “OM” on Nasdaq, shares rose to $61.60 on opening day after an initial price set by the company of $27 per share. The stock price settled at $60.01 by the end of the day on Sept. 18.
The stock sale included the underwriters’ option to purchase 1,342,666 additional shares of common stock at the $27 per share price, the company said.
Outset’s Tablo Hemodialysis System was approved by the FDA in April for home dialysis use and is also sold for treating acute care dialysis in hospital settings.
Company CEO Leslie Trigg told Healio Nephrology the strong interest from the investor community in Outset and the Tablo dialysis machine was likely spurred by a number of “structural tailwinds” that have occurred recently, including government policy encouraging an increase in home dialysis use, incentives for dialysis providers to use new technology, as well as the potential safety advantages that home dialysis offers during pandemics, like that for COVID-19.
“When you consider the last device that was approved [by the FDA] for home dialysis, it was over 15 years ago,” Trigg said, referring to NxStage Medical’s System One dialysis machine. “I think what has changed 15 years later is these structural tailwinds that didn’t exist then, like the President’s executive order [the Advancing American Kidney Health initiative that encourages greater use of home dialysis], the add-on incremental payments for new devices used for home dialysis and the eligibility of the [end-stage renal disease] ESRD population in Medicare Advantage.
I think the final structural tailwind is COVID-19, along with the rapid adoption of telehealth. These are market-shifting changes that are occurring right now,” Trigg said, adding, “For us, it is being at the right place at the right time, with the right technology.”
In February, the company received $125 million from D1 Capital LP, a global investment advisory firm, to help finance production of the Tablo.
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