Although its devices treat a potentially large population of patients suffering from various heart and vascular conditions, Plymouth-based AGA Medical Corp. could find the response to its public offering a bit cool.
"Although they serve some of the bigger markets in medical devices, their filing comes at a time that is clearly very challenging," said Jay Hare, partner of the Technology Industry Group at Pricewaterhouse Coopers in Minneapolis.
AGA filed to go public with the Securities and Exchange Commission on Monday, with hopes of raising up to $200 million, at a time when the stock market is especially volatile.
The medical device firm did not disclose the expected number of shares or price range.
If AGA goes public it will be the first in the state to do so this year; no Minnesota company has completed an initial public offering (IPO) since November. The company would be listed on the NASDAQ exchange under the ticker AGAM.
In 2008, two Minnesota-based medical companies have withdrawn planned IPOs: Vision-Ease Lens Corp. and Transoma Medical. A software company, IDS Group Inc. of Minneapolis, filed for an $86 million offering in February but has not yet completed the deal.
AGA was co-founded in 1995 by medical device pioneer Dr. Kurt Amplatz, who for many years worked as a professor and researcher at the University of Minnesota's Department of Radiology. The company's signature product repairs holes in the heart's interior wall using a minimally invasive technique that avoids the need for open-heart surgery.
AGA is involved in clinical trials to determine whether closing the patent foramen ovale (PFO), or a small hole in the heart, with its Amplatzer PFO Occluder device will reduce the incidence of some types of strokes and migraines. AGA estimates the market for a device treating strokes could be as high as $1 billion.
AGA is also developing a device to treat atrial fibrillation -- irregular electrical activity in the upper chambers of the heart that afflicts about 2 million Americans.
The stroke and atrial fibrillation device markets are both "ripe and promising," said Ross Meisner, managing partner of St. Paul-based Dymedex Consulting. "Any company successfully competing in these areas could reap some significant rewards."
AGA said in the filing it plans to use IPO proceeds to repay debt and pay dividends on stock, with remaining proceeds used for working capital and general corporate purposes.
Citi, Deutsche Bank Securities and Lehman Brothers are serving as the IPO's lead underwriters, with Bank of America, Wachovia Capital Markets, Piper Jaffray and Leerink Swann underwriting the offering as well.
AGA announced last week that co-founder Franck Gougeon was stepping down as president and CEO to focus on "strategic planning" for the company's future. John Barr, who has been chief operating officer since September 2005, was named Gougeon's replacement.
Last month, the company said it agreed to pay a $2 million criminal fine to the U.S. Department of Justice in a case involving alleged bribery payments to Chinese officials. If the company abides by the terms of an agreement with the government for three years, charges will be dismissed.
Janet Moore • 612-673-7752 Staff writer John Oslund contributed to this report.
