Tandem Diabetes Care Shares Plans for IPO

Early October this year, Tandem Diabetes Care Inc. filed a registration statement on Form S-1 with the Securities and Exchange Commission for a proposed initial public offering (IPO) of its common stock. On Nov. 4, the company relayed the terms for its IPO: The San Diego, Calif.-based company plans to raise $100 million by offering 7.1 million shares at a price range of $13 to $15. At the midpoint of the proposed range, Tandem Diabetes Care would command a fully diluted market value of $329 million.

Tandem Diabetes Care, which was founded in 2006 and booked a rrported $21 million in sales for the 12 months ended Sept. 30, 2013, plans to list on the NASDAQ under the symbol TNDM. Tandem Diabetes Care initially filed confidentially on Aug. 12, 2013. BofA Merrill Lynch and Piper Jaffray are the joint bookrunners on the deal.

Tandem Diabetes Care makes medical devices for insulin-dependent diabetics.The company claims its t:slim device, which resembles a smartphone, is the first insulin pump to feature a high-resolution color touchscreen and is the slimmest and smallest insulin pump on the market. The device uses a miniaturized pumping mechanism that draws insulin from a flexible bag in a replaceable cartridge. Conventional insulin pumps rely on a plunger-type mechanism. The company also developed software and a Web-based data management application designed to make it easier for patients to track their insulin use.

The company began selling the t:slim in the third quarter of 2012, and reported nearly $2.48 million in sales for the year. Over the first six months of this year, Tandem Diabetes had accumulated sales of nearly $11 million, with a gross profit of more than $2.4 million.

But company officials say it still operates at a substantial net loss, and expects that will continue for at least the next several years. Tandem Diabetes reported a net loss of almost $26.5 million for the first six months of this year, and disclosed it has an accumulated deficit of $132.5 million.

Tandem Diabetes has raised about $88.7 million in venture funding from firms like Delphi Ventures, which now holds a nearly 27 percent stake, Domain Associates (more than 26 percent), TPG Biotechnology Partners (over 20 percent, HLM Venture Partners (more than 11 percent) and Kearny Venture Partners (over 6 percent).