| Somnus Medical Technologies, Inc. | |||
| Proposed Ticker: | SOMN | 285 N. Wolfe Road | |
| Exchange: | NASDAQ-National Market | Sunnyvale, CA 94086 | |
| Industry: | Manufacturing (SIC Code 3841) | (408) 773-9121 | |
| # of Employees: | 51 | ||
| Type of Shares: | Common Shares | Filing Date: | 9/11/97 | |
| U.S. Shares Filed: | 0 | Filing Price: | - | |
| Non-U.S. Shares Filed: | 0 | Offering Amount: | $46,000,000 | |
| Primary Shares: | 0 | Expenses: | - | |
| Secondary Shares: | 0 | Shares Out After: |
| Manager | Tier | Phone |
| J.P. Morgan Securities Inc. | Lead Manager | (212) 648-0517 |
| Smith Barney Inc. | Co-manager | (212) 723-7300 |
| UBS Securities Inc. | Co-manager | (212) 821-4510 |
| Issuer's Law Firm: | Wilson, Sonsini, Goodrich & Rosati |
| Bank's Law Firm: | Cahill Gordon & Reindel |
| Auditor: | Ernst & Young |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $0.00 | $0.23 | $0.00 | Assets: | $11.97 |
| Net Income: | -$3.10 | -$4.55 | -$0.79 | Curr Assets: | $9.62 |
| EPS: | -$0.37 | -$0.48 | -$0.11 | Liabilities: | $3.00 |
| Prior EPS: | -$4.30 | -$0.19 | Curr Liabilities: | $1.26 | |
| Cash Flow/Oper: | -$2.29 | $6.10 | $2.08 | Equity: | $8.97 |
| Cash Flow/Fin: | $12.40 | -$1.42 | -$0.64 | Cash: | $9.21 |
| Cash Flow/Inv: | -$1.28 | -$1.42 | Working Cap: | $8.36 | |
| Business Description |
| The company designs, develops, manufactures and markets innovative medical devices that utilize its proprietary radiofrequency technology for the treatment of upper airway disorders. The Company's Somnoplasty System provides physicians with a suite of products designed to offer minimally-invasive, curative treatment alternatives for disorders of the upper airway, including snoring, obstructive sleep apnea ("OSA") and enlarged turbinates. The Somnoplasty System shrinks tissue in the upper airway by utilizing automated RF generators and a suite of disposable, single-use, needle electrode devices which deliver controlled thermal energy to obstructed areas, while protecting the delicate mucosal lining of the tissue. The Company received U.S. Food and Drug Administration ("FDA") 510(k) premarket clearance ("510(k) clearance") in July 1997 for the use of the Somnoplasty System in the treatment of snoring. The Company has also received the European Union CE Mark (the "CE Mark") for use of the Somnoplasty System in the treatment of upper airway disorders. The Company believes that the clinical and patient benefits of the Somnoplasty System include its effectiveness, quick procedure time, outpatient setting, use of local anesthesia and low post-procedural pain. These benefits represent a significant advancement to physicians and patients over existing treatment options, which, depending upon the disorder, are highly-invasive, non-curative and/or expensive. To date, the Somnoplasty procedure has been performed for the treatment of snoring on over 85 patients. |
| Competition |
| The medical device industry is subject to intense competition. The market for products designed to treat upper airway disorders is highly competitive, and the Company expects competition to increase. Accordingly, the Company's future success will depend in part on its ability to respond quickly to medical and technological change and user preference through the development and introduction of new products that are of high quality and that address patient and surgeon requirements. In the treatment of snoring, the Somnoplasty System is subject to intense competition from existing products, such as nasal dilators and oral appliances, and surgical procedures, such as LAUP. The U.S. market for the treatment of enlarged turbinates, a market which the Company intends to enter in the near future, is dominated by over-the-counter treatments, such as nasal sprays, and surgical procedures, such as turbinectomies. The U.S. market for products for the treatment of OSA, a market which the Company hopes to enter in the future, is currently dominated by CPAP products produced by Healthdyne Technologies Inc., Nellcor Puritan Bennett, Inc., a wholly owned subsidiary of Mallinckrodt Inc., ResMed Inc. and Respironics, Inc. There can be no assurance that the Somnoplasty System will successfully compete with or replace any existing products for these or other indications. Most of the Company's competitors and potential competitors have greater financial, research and development, manufacturing and sales and marketing resources than the Company. In addition, some of the Company's competitors and potential competitors sell additional lines of products, and therefore can bundle products to offer higher discounts or offer rebates or other incentive programs to gain a competitive advantage. The Company's inability to compete effectively against existing or future competitors would have a material adverse effect on its business, financial condition and results of operations. The Company believes that the primary competitive factors in the market for treatment of upper airway disorders include regulatory approvals, clinical and patient acceptance, post-operative discomfort, ease of use, product performance, product price, product supply, marketing and sales capability and the enforceability of patent and other proprietary rights. The Company believes that it is or will be competitive with respect to these factors. Nonetheless, because the Company'sproducts have recently been introduced or are still under development, the relative competitive position of the Company in the future is difficult to predict. |
| Business Plan |
| The company's strategy is to establish the Somnoplasty System, which utilizes its proprietary RF technology as the standard of care for the treatment of a variety of upper airway disorders. The following are key elements of the company's strategy: (I) Provide Minimally-Invasive, Curative Treatments for Upper Airway Disorders, (ii) Pursue Additional Indications for the Somnoplasty System, (iii) Create Global Distribution through Direct Sales Force and Collaborative Relationships and (iv) Acquire and License Complementary Technologies and Products. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used research and development, clinical trials, regulatory matters, development of sales and marketing capabilities and other general corporate purposes. |