Silk Road Medical's IPO: What You Need To Know

Silk Road Medical Inc will hit the Nasdaq under ticker SILK on Thursday. Here’s what you should know before making a bid.

The Offering

Silk Road said it would issue nearly 4.7 million shares between $15 and $17. The offering represents 16.3 percent of outstanding shares. Late Wednesday, the company priced 6 million shares of common stock at $20 each.

Underwriters include JP Morgan, Bank of America Merrill Lynch, BMO Capital Markets and Stifel Nicolaus.

The medtech company qualifies as an emerging growth company under the U.S. JOBS Act, which exempts management from certain SEC disclosure requirements.

The Company

Based in California, Silk Road develops and manufactures proprietary transcarotid medical devices for carotid artery disease. Its ENROUTE platform includes a Transcarotid Neuroprotection System, Transcarotid Stent System, Transcarotid Peripheral Access Kit and guidewire.

Altogether, the company provides minimally-invasive transcarotid vascular access, introduce diagnostic agents and devices, and provide embolic protection during artery procedures. In lay terms, they reduce the risk of stroke.

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The Market

The 12-year-old company markets and sells its products in the U.S. through a third-party seller. From its 2015 debut in the markets through the end of last year, more than 7,750 procedures had been done globally using Silk Road technology.

“We are the first and only company to obtain FDA approvals, secure specific Medicare reimbursement coverage, and commercialize products engineered and indicated for use in TCAR [transcarotid artery revascularization],” the company boasted in its S-1 filing.

Its estimates suggest a U.S. market opportunity of 427,000 patients annually diagnosed with carotid artery disease warranting stroke prevention. Their treatment amounts to $2.6 billion.

It intends to soon commercialize in Europe, which recently cleared two products with CE Mark approval, and pursue regulatory approval in China, Japan and other foreign markets.

The Finances

Management recorded $34.6 million in revenue last year, representing 142-percent growth from $14.3 million in 2017. Net losses increased from $19.4 million to $37.6 million in that same time.