Heart monitor firm USCOM launches $16m IPO

Devices company USCOM is seeking to raise AUD$16 million in an IPO to raise funds to commercialise its heart monitor.

The Sydney-based company is opening its offer of 8 million shares priced at $2 per share on November 13, and expects to list on the Australian Stock Exchange on or before December 10 with the code UCM. The market capitalisation of the company at the issue price is $76 million, with the offer representing 21 per cent of the issued shares.

CEO Gary Davey said the bulk of the funds raised would be put toward the worldwide commercialisation of the USCOM Ultrasonic Cardiac Output Monitor, which uses ultrasound technology to cost-effectively and non-invasively measure blood flow across the cardiac valves.

The current "gold standard" for measuring cardiac output uses a costly and invasive pulmonary artery catheter, with a high risk of infection and doubts about its efficacy, Davey said.

Cardiologist Rob Phillips, chairman and cofounder of the company along with Davey, invented the device, and initial patents were filed in 1998.

"We've completed the technical development stage, and the device is working well. We've manufactured the first 60 machines," said Davey.

The USCOM monitor received TGA approval in late 2001, and is in the final stages of approval for a European CE mark, expected before the end of the year. In addition, an application has been lodged in China and a 510K application will be lodged with the FDA early next year.

Initially, USCOM plans to concentrate on the Australian, Asian and European markets. The monitor has been trialled at a number of sites in Australia, New Zealand, Belgium, France, Germany and Hong Kong; and marketing and distribution teams are already in place in Australia and Asia, with agreements signed in Europe and the Middle East.

"We expect in the coming months to build up a good story there," Davey said.

But in the lucrative US market, which comprises around 45 per cent of the estimated $7 billion global market, the company is moving more slowly.

"We're taking the cautious view, planning the strategy in 2004 and entering the market in 2005," Davey said. "We've started discussions with various potential partners but we're not going to rush into it."

Davey said the development of the device had been supported through three government grants, including Federal COMET and BIF grants and a NSW BioFirst grant, and more recently received $1.65 million equity funding from the Bell Potter Medical Innovation Trust.

A small proportion of the funding is also to be put towards continued R&D efforts, including the development of a more fully automated version of the USCOM device.

"Our ambition is to roll out new products or versions on an annual basis," said Davey.

Bell Potter Securities is underwriting the USCOM IPO.