| Symphonix Devices, Inc. | |||
| Ticker: | SMPX | 3047 Orchard Parkway | |
| Exchange: | NASDAQ-National Market | San Jose, CA 95134 | |
| Industry: | Manufacturing (SIC Code 3841) | (408) 232-0710 | |
| # of Employees: | 40 | ||
| Type of Shares: | Common Shares | Filing Date: | 11/17/97 | |
| U.S. Shares: | 2,300,000 | Offer Date: | 2/12/98 | |
| Non-U.S. Shares: | 0 | Filing Range: | $11.00 - $13.00 | |
| Primary Shares: | 2,300,000 | Offer Price: | $12.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.84 | |
| Offering Amount: | $27,600,000 | Selling: | $0.00 | |
| Expenses: | $800,000 | Reallowance: | $0.00 | |
| Shares Out After: | 11,696,021 |
| Manager | Tier | Phone |
| Cowen & Company | Lead Manager | (212) 495-6000 |
| UBS Securities Inc. | Co-manager | (212) 821-4510 |
| Issuer's Law Firm: | Wilson, Sonsini, Goodrich & Rosati |
| Bank's Law Firm: | Cooley Godward Castro Huddleson & Tatum |
| Auditor: | Coopers & Lybrand |
| Registrar/Transfer Agent: | BankBoston |
Dollar amounts in U.S. millions except for per share data | |||||
| 9 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 9/30/97 | 9/30/96 | 9/30/97 | ||
| Revenue: | $0.00 | $0.00 | $0.00 | Assets: | $12.56 |
| Net Income: | -$6.11 | -$5.63 | -$4.40 | Curr Assets: | $11.84 |
| EPS: | -$0.71 | -$0.59 | Liabilities: | $1.90 | |
| Prior EPS: | -$5.13 | -$3.94 | Curr Liabilities: | $1.50 | |
| Cash Flow/Oper: | -$5.39 | $5.86 | $6.53 | Equity: | $10.65 |
| Cash Flow/Fin: | $10.05 | -$2.29 | -$2.29 | Cash: | $11.53 |
| Cash Flow/Inv: | -$0.69 | -$2.29 | Working Cap: | $10.35 | |
| Business Description |
| The company is a leader in the development of proprietary semi-implantable and implatable products, or soundbridges, for the management of moderate to severe hearing impairment. The Company believes that its family of Vibrant soundbridges, designed to overcome the inherent limitations of traditional hearing devices, represent a novel approach in the management of hearing impairment. The Company's initial product under development, the Vibrant soundbridge, is a semi-implantable device which mechanically drives the three small bones of the middle ear to overcome the user's hearing impairment. The Company's second generation product, the Vibrant P programmable soundbridge, provides a greater degree of customization to address the specific needs of a particular user's hearing loss and expands the types of hearing loss that can be managed by the Company's products. |
| Competition |
| The medical device industry is subject to intense competition in the United States and abroad. The Company believes its products will compete primarily with the traditional approaches to managing hearing impairment, principally hearing aids. Principal manufacturers of acoustic hearing aids include Siemens Hearing Instruments, Inc., Philips Medical Systems North America Co., Starkey Laboratories Inc., Beltone Electronics Corp., Dahlberg Inc., ReSound Corp., Oticon, Inc., Widex Hearing Aid Co., Inc. and Phonak Inc. There can be no assurance that the Company's soundbridges will be able to successfully compete with established hearing aid products. Although, to the Company's knowledge, none of these acoustic hearing aid manufacturers are currently developing direct drive devices, there can be no assurance that these potential competitors will not succeed in developing technologies and products in the future that are more effective, less expensive than those being developed by the Company or that do not require surgery. The Company is aware of several university research groups and development-stage companies that have active research or development programs related to direct drive sensorineural hearing devices. Research of this type has been conducted at various sites for over 20 years. In addition, some large medical device companies, some of which are currently marketing implantable medical devices, may develop programs in hearing management. Certain of these companies have substantially greater financial, technical, manufacturing, marketing and other resources than the Company. In addition, there can be no assurance that certain of the Company's competitors will not develop technologies and products that may be more effective in managing hearing impairment than the Company's products or that render the Company's products obsolete. The Company believes that the primary competitive factors in the hearing management market will be the quality of the hearing enhancement, safety, whether surgery is required, reliability, endorsement by the surgeon and audiology communities, patient comfort, cosmetic result and price. The medical device industry is characterized by rapid and significant technological change. Accordingly, the Company's 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. |
| Business Plan |
| The Company's objectives are to establish its family of Vibrant soundbridges as the standard of care worldwide for the management of moderate to severe hearing impairment and to establish Symphonix as the leading company in the hearing management market. The following are key elements of the company's strategy: (I) Demonstrate improved quality of life, (ii) Develop surgeon endorsement of the company's family of soundbridges, (iii) Leverage the company's patented core technology and (iv) Protect and enhance the company's proprietary position. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for research and development, including clinical trials; development of a sales and marketing organization; construction of a clean room and other capital expenditures; working capital and general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Entities affiliated with Sierra Ventures | 20.70% | 16.70% |
| Entities Affiliated with Mayfield | 17.90% | 14.40% |
| Harry S. Robbins | 14.10% | 11.30% |
| Coral Partners IV, Limited Partnership | 11.70% | 9.40% |
| Geoffrey R. Ball | 7.20% | 5.80% |
| Johnson & Johnson Development Corporation | 5.80% | 4.70% |
| Officer Name | Title | Age |
| Harry S. Robbins | Chairman of the Board of Directors, President and Chief Executive Officer | 50 |
| John de Mora-Mieszkowski | Director of European Sales and Marketing | 52 |
| Alfred G. Merriweather | Vice President of Finance and Chief Financial Officer | 43 |
| Peter Hertzmann | Vice President of Marketing and Clinical Affairs | 49 |
| Patrick J. Rimroth | Vice President of Operations | 42 |
| R. Michael Crompton | Vice President of Regulatory Affairs and Quality Assurance | 39 |
| Bob H. Katz | Vice President of Research and Development | 37 |
| Geoffrey R. Ball | Vice President, Chief Technical Officer and Director | 33 |