Sientra Inc. is hoping that by making its customers better looking, its stock will be more attractive to investors.
The maker of implants and related products for breast augmentation and reconstruction surgery, which recently moved headquarters to Irvine from Santa Barbara, calls itself a “medical aesthetics company exclusively focused on plastic surgeons.”
However, investors have soured on the stock’s look (Nasdaq: SIEN), driving it from as high as $25 in 2018 to as low as 15 cents last October, when it announced it would issue additional shares to raise $13.2 million.
Sientra underwent its own corporate surgery on Jan. 23, when it made a 1-for-10 reverse stock split as the company aimed to stay above $1, the prerequisite for Nasdaq listing.
The market is eyeing the price with interest, keeping it around $2 and a $20 million market cap as of press time.
While the company’s revenue fell during the pandemic, analysts are estimating a rebound, predicting a 13% climb to $90.8 million in 2022 and a 17% jump to $105.9 million this year.
Sientra is aiming to double its revenue in three years, according to an investment deck on its website. The presentation said the addressable market for breast augmentation and reconstruction is $14 billion over the next five years, while toxin/filler is $11 billion.
Its product portfolio includes shaped breast implants, breast tissue expander, a fat grafting system, and Biocorneum, which it says is “the #1 performing, preferred and recommended scar gel of plastic surgeons.”
The company’s history on Wall Street has been ugly at times.
Sientra, which was founded in 2006 by Hani Zeini, went public in 2014 at pre-split adjusted $15 a share.
Prior to a $60 million stock offering in 2015, Zeini was accused of hiding information about the quality of its silicone breast implants manufactured by an outside contractor in Brazil. The day after the offering closed, news about the manufacturing issue became public, causing the shares to drop 53%, the Securities and Exchange Commission said. Without admitting guilt, Zeini in 2019 agreed to a $160,000 civil penalty and was barred for five years as an officer or director at a publicly traded company.
Zeini was replaced by Jeffrey Nugent, who was CEO until 2020.
The company’s said it received a grand jury subpoena dated Sept. 30 from the Department of Justice requesting materials concerning “the trading activities” of its former CEO in 2019 and 2020, Sientra said in a filing without identifying the CEO. Sientra said the investigation doesn’t mean that anyone has violated the law.
The Business Journal’s efforts to reach the company were unsuccessful.
To replace Nugent, the company hired Ron Menezes, who was president and general manager for Almirall U.S.-Dermatology, where he helped acquire Allergan’s dermatology assets in 2018.
In 2021, it hired as chief financial officer Andy Schmidt, who previously was CFO at Iteris Inc., and Smith Micro Software Inc., two OC-based companies that in recent years have moved out of state.
Previously, Schmidt served as the CFO of San Diego-based Guardion Health Sciences, where he helped restore the company to Nasdaq listing compliance. It currently trades at $7.20 a share and an $8.8 million market cap (Nasdaq: GHSI).