Beta Bionics Inc. was born out of a father’s desire to improve his son’s quality of life following a diabetes diagnosis.
Today, 10 years after its founding, it’s now a publicly traded company.
The company went public on Jan. 30, less than a month after filing plans for an initial public offering with the Securities and Exchange Commission.
Beta Bionics (Nasdaq: BBNX) originally planned to raise $114.4 million by offering 7.5 million shares at a price range of $14 and $16, according to a Jan. 22 filing.
It ended up upsizing those plans, increasing the offering to 12 million shares at $17 apiece, raising $204 million.
Shares in the company opened at $22 and ended the day at $23.63 and a $975 million market cap.
“Today’s an important milestone in our history and I’m excited to share it with you all,” Chief Executive Sean Saint said in a livestream during IPO day.
Beta Bionics’ IPO marks one of the largest public offerings for an Orange County-based company in over three years, second behind Irvine-based cancer research firm CG Oncology Inc., which raised $380 million last January.
The company has already raised more than $280 million since its founding in 2015, and just one month ago closed on a $60 million Series E funding round led by Wellington Management.
Wellington Management also agreed to purchase $17 million worth of common stock in a concurrent private placement in last month’s IPO.
Paradigm Changer
Beta Bionics commercially launched iLet Bionic Pancreas in late 2023 after it received Food and Drug Administration clearance for use in individuals ages six and older with Type 1 Diabetes (T1D).
It’s the first FDA approved pump to utilize adaptive algorithms to learn each person’s unique and ever-changing insulin requirements to simplify diabetes management.
“We believe this marks a significant advancement over other insulin delivery technologies by offering a differentiated combination of improved glycemic control and a vastly simplified experience for users and caregivers,” Beta Bionics’ said last month in its registration filing.
The company has shown there is tremendous demand. Beta Bionics’ revenue jumped to $44.7 million for the nine months ended Sept. 30, 2024; in 2023, its first year of sales, the company reported $12 million.
Revenue is generated primarily from sales of the iLet and single-use products that are used together with the iLet, including cartridges for storing and delivering insulin and infusion sets that connect the iLet to a user’s body through a network of distributors and pharmacies that resell the products to people with diabetes.
Proceeds to Fund Two Products in Pipeline
Beta Bionics plans to use the IPO proceeds to fund clinical trials for a bihormonal configuration for the iLet.
This new capability would allow the iLet to administer not only insulin but also glucagon. Both hormones are naturally produced by the pancreas to regulate blood sugar.
While insulin helps lower blood sugar levels, glucagon converts stored energy back into glucose and releases it into the bloodstream, preventing blood sugar levels from dipping too low.
Saint likened the process to the gas and brake pedals in a car.
“You can drive a car without brakes, but it’s a heck of a lot easier with them,” Saint said in an interview with Schwab Network the same day Beta Bionics made its public debut.
The rest will go toward the submission process for a patch pump, which is in the early stages of development.
The wearable device will feature one component for the electronics and monitor and another disposable element for the insulin reservoir, adhesive, insertion device and cannula.
“Our technology fundamentally is an algorithm,” Saint said. “Right now, it’s applicable to a percentage of people with diabetes. The other half, the other percentage, like patch pumps, so we want to be able to access that as well.”
Beta Bionics expects to commercialize the patch pump by the end of 2027.
Net proceeds from the IPO will fund operating expenses and capital expenditure through the first half of 2028, according to the company’s prospectus.
Pursuing Multi-Channel Coverage
In the same interview, Saint said that in recent quarters, the company has experienced a shift from durable medical equipment (DME) to pharmacy benefit manager (PMB) coverage.
The shift posed a “temporary drag” on revenues, which were still up 22% in the fourth quarter, according to Saint.
“The reason for that… is Beta Bionics is taking the risk,” Saint said. “We’re taking the risk that you’re going to love our product, and that’s where that removal of the upfront payment comes from.”
Beta Bionics recently began pursuing third-party coverage and reimbursement from payors under both DME and PMB coverage to make the iLet more accessible for both patients and healthcare providers who prescribe the device.
Having multi-channel coverage will also give the company higher revenue streams, as evident by a 25% increase in new patient growth for the fourth quarter, according to Saint.
Beta Bionics was co-founded in 2015 by Edward “Ed” Damiano, a biomedical engineering professor at Boston University. Damiano’s son David was born in 1999 and developed T1D at 11 months old. The diagnosis motivated Damiano to develop a solution to improve his son’s life.
In 2022, the company announced Saint as its new CEO, a diabetes device industry veteran who himself was diagnosed with T1D in 2011.
Soon after, he co-founded Companion Medical, which manufactures the InPen System, a smart insulin pen that uses Bluetooth to send dose information to a mobile app. It was acquired by Medtronic PLC (NYSE: MDT) in 2020.
Beta Bionics manufactures the iLet device and its accompanying ready-to-fill insulin cartridges at a 50,000-square-foot facility in Irvine, which it moved into in 2020.
