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IntraLase files for initial public offering
The common stock shares, to be listed on the NASDAQ exchange, could be worth as much as $92 million, according to information from IntraLase.
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IRVINE, Calif. – Laser manufacturer IntraLase filed with government securities regulators in May for an initial public offering of common stock that may be worth as much as $92 million. The number of shares to be offered and the price per share for the IPO were not announced.
IntraLase manufactures and markets the FS laser, a femtosecond laser that, according to company documents filed with the SEC, “improves the safety, precision and visual acuity of LASIK surgery by providing a computer-controlled laser solution as an alternative to the handheld mechanical, metal-bladed microkeratome traditionally used to create the corneal flap.”
In addition to the FS laser, the company also makes and markets the IntraLASIK software that is used in conjunction with the laser.
As of March 31, 2004, the company reported it had sold or leased 123 lasers and sold about 156,000 per-procedure disposable patient interfaces. Based on total LASIK procedure volume, the company calculated that in the first 3 months of 2004, its device had about 12% market share in the United States compared to just 5% at the end of last year, according to Robert Palmisano, president and chief executive officer of IntraLase.
“This initial public offering is a milestone in the growth of the company,” Mr. Palmisano said in an interview with Ocular Surgery News. The company has done extremely well and the technology has been widely accepted by ophthalmologists around the world, he said.
Risks
As part of the filing of its registration statement with the SEC, IntraLase noted some risks related to the industry. The documents noted that the company’s continued success depends on the continued acceptance of LASIK surgery by surgeons and the public.
This acceptance will be due in large part to the economy and the adoption of the FS laser by the ophthalmic community, the documents noted. Estimates are that less than 7% of people eligible for LASIK have had the procedure, according to the IntraLase documents.
In addition, the company noted that LASIK is generally not paid for through insurance programs but rather entirely by the patient.
“Accordingly, weak or uncertain economic conditions may cause individuals to be less willing to pay for LASIK surgery, as was evidenced by the 14% decline in LASIK procedures in the United States in 2002 as compared to 2001,” the documents noted.
Another risk in the LASIK industry, according to the company documents, is the potential for changes in the of patients to use pre-tax dollars to pay for LASIK surgery. Currently, many patients can use “cafeteria” plans under Section 125 of the Internal Revenue Code to pay for LASIK surgery to ease the burden of cost.
“Changes in the U.S. tax laws or regulations governing cafeteria plans could reduce or eliminate the ability of patients to use pre-tax dollars to pay for LASIK surgery, resulting in an increase in the total cost borne by the patient, which would likely reduce the volume of LASIK surgeries,” the company documents note.
The company identified makers of conventional metal microkeratomes as its primary competitors, including Bausch & Lomb, Moria/Microtech, Advanced Medical Optics and Nidek. The company documents noted that “microkeratomes are less expensive to manufacture than our laser and our competitors may offer microkeratome systems at a lower price.”
However, elsewhere the SEC documents point out that “surgeons who have adopted the IntraLase technology are now able to offer their patients improved safety and predictability and, as a result, patients achieve better visual acuity.” Surgeons may also derive the benefits of increased fees and procedure volume, the documents note.
Use of proceeds
The company’s strategy, according to the documents, will include enhancing its current product line as well as developing new applications for its current technology.
Following SEC approval, the company said it intends to use $1.1 million of the net proceeds to repay debts owed for equipment and to further the company’s growth. As of March 31, 2004, the company had accumulated a deficit of approximately $55.3 million, the documents said.
The company said international sales represented 18% of its total revenues in 2003 and 19% in the first 3 months of 2004. Further expansion into international markets with increasing sales and marketing activities are planned, according to the SEC filing.
For Your Information:
- Robert J. Palmisano can be reached at 3 Morgan, Irvine, CA 92618; 949-859-5230, ext. 241; fax: 949-461-3323; e-mail: bpalmisano@intralase.com.
- IntraLase, manufacturer of the FS laser and IntraLASIK software, can be reached at 3 Morgan, Irvine, CA 92618; 877-393-2020; fax: 949-641-3323; Web site: www.intralase.com.