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Inari Medical’s IPO Launches

Irvine-based Inari Medical Inc., a commercial-stage medical device company whose products treat patients suffering from blood clots and other diseases affecting veins, says the impacts of COVID-19 have disrupted its local operations, but it didn’t scuttle its plans to go public.

The firm, founded in 2011 and with an employee base of 240, last Friday launched its initial public offering, the first traditional public listing of an Orange County-based company this year. It is one of just a handful of firms to go public in the past few months, after the coronavirus largely put a lockdown on the IPO business.

The company filed its first registration statement pertaining to the IPO in February, with a placeholder amount of $100 million.

Regulatory documents filed early last week indicated the company planned to sell some 7.3 million shares of common stock, with an expected price range between $14 and $16 per share.

Last Thursday, the expected price range was boosted to between $17 and $18 per share, an indication of strong institutional investor interest.

The next day, the upsized 8.2 million share IPO kicked off at an even higher price of $19 per share. Within hours, its shares had more than doubled and were trading above $40 per share, valuing Inari at more than $1.9 billion when the Business Journal went to press.

The IPO raised more than $150 million in proceeds for the firm, which had earlier raised about $54 million in private placements, half from a Series C round in 2018.

The device maker said the IPO proceeds will fund commercialization and research.

Inari listed its stock on the Nasdaq under the ticker symbol “NARI.” BofA Securities, Morgan Stanley, Wells Fargo Securities and Canaccord Genuity underwrote the offering. Inari’s legal representatives are with the Latham & Watkins LLP office in Costa Mesa.

Industry Pioneer

Bill Hoffman, who has been chief executive since 2015, was previously CEO at Visualase Inc., a private company focusing on MRI-guided lasers and which was acquired by Medtronic PLC in 2014.

Inari claims to be a pioneer in treating blood clots in veins.

Other devices on the market were developed for arterial clots, repurposed for venous uses and aren’t as effective, it said in regulatory filings.

Inari’s two devices, the FlowTriever and ClotTriever systems, generate all its revenue. The products—both cleared in the U.S. and with European CE mark approval—are novel, minimally invasive, mechanical catheter-like devices.

Filings with the Securities and Exchange Commission indicate Inari’s revenue soared sevenfold to more than $51 million in 2019, growth that continued into the first part of 2020.

Slowdown in Procedures

Challenges resulting from COVID-19 began emerging in the past two weeks of the quarter, as hospitals started putting off non-urgent surgeries, according to the company.

“Weekly procedure volumes declined by approximately 40% by mid-April when compared to weekly procedure volumes in early March,” it said.

Still, for the first quarter of 2020, nearly 2,400 procedures were performed using Inari’s products, compared to 1,800 procedures in the prior quarter.

The company generated revenue of $27 million for the March 31 quarter, with a gross margin of 90% and net income of $4.1 million; that compares to revenue of $19.9 million, gross margin of 89.2% and net income of $400,000 for the prior quarter.

Among COVID-19-related corporate moves, Inari said it implemented a work-from-home strategy for administrative functions “that includes launching various efficiency projects in information technology, accounting and operations.” It also worked to enhance “our physician outreach and training with the launch of our Clot Warrior Academy consisting of a series of live webinars and an online education portal.”

Inari said it produced four months’ worth of inventory before suspending production in April.

The company said in SEC filings that it hasn’t had to make any furloughs or layoffs during the crisis; rather it said it has used the downturn to recruit and hire more salespeople.

Inari manufactures and assembles its ClotTriever and FlowTriever products at a 38,200-square-foot facility in the Irvine Spectrum area; efforts to revamp its building to factor in social distancing and other safety measures were featured in the May 18 print edition of the Business Journal.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.

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