Lens on Aroa Biosurgery: Medical Device Company Set for ASX debut

Summary

• The Australian Stock Exchange has consistently been ranked among the top exchange across the globe for capital raising and is the leading interest rate derivatives in the Asian market.
• New Zealand-based soft tissue regeneration Company Aroa Biosurgery is set to list on the ASX with the code ARX, and the IPO values the Company at A$225 million upon listing.
• Aroa is engaged in enhancing the quality and rate of healing in complex wounds and for soft tissue reconstruction with its Endoform® Technology.
• The total addressable market for the current products of Aroa Biosurgery surpasses nearly US$1.5 billion in the United States.

The process of issuing shares by a Company for the first time on a stock exchange is known as an IPO, or Initial Public Offering. The IPO roadshow creates media houses as well as investors very thrilled, as they wait for revealing a new story on the stock exchange.

In Australia, Initial Public Offerings have perhaps been an event of highest traction from investors, and for plenty of market participants, upcoming IPOs are the preferred research focus. Moreover, IPOs offer companies an opportunity for achieving capital by presenting shares through the primary market.

To KNOW MORE, DO READ: Understanding IPO

With Australia having the largest pool of investable funds across Asia and the Australian Stock Exchange (ASX) consistently being ranked in the top exchange across the globe for capital raising, hence listing on the stock exchange of Australia offers to capital in the fastest growing regions across the world.

With this backdrop, we will acquaint you with one New Zealand based Company Aroa Biosurgery which is all set to ASX debut.

About Aroa Biosurgery

Auckland, New Zealand based Company Aroa Biosurgery is a soft tissue regeneration Company that is focused on enhancing the rate as well as the quality of healing in complex wounds and reconstruction of soft tissue.

Early in 2014, the Company moved and expanded into a new purpose-built capacity in Auckland, New Zealand. The first product of Aroa Biosurgery Endoform Dermal Templat is for treatment of chronic non-healing wounds, was introduced in the US in 2013 by Hollister Inc. after obtaining FDA clearance.

The first commercial surgical product of Aroa Biosurgery, a Reinforced Bioscaffold was developed in partnership with Tela Bio Inc. The FDA authorised the product in December 2014, and clinical trials commenced in the US in May 2015 for its application in ventral hernia repair and reconstruction of the abdominal wall.

Aroa Biosurgery to list on the ASX

On 24 Jun 2020, Aroa Biosurgery disclosed that the Company is set to list on ASX (Australian Securities Exchange) and as part of an IPO it will raise A$45 million.

Moreover, Aroa notified that this offer would comprise nearly A$30 million of initial capital via issue of 40 million new shares at a per share price of A$0.75, with the rest A$15 million to develop part of a sell-down by its existing shareholders. The IPO values the Company at A$225 million upon listing, and the Company anticipates beginning trading on ASX under the code ARX from 30 July 2020.

The Company disclosed that funds from the IPO would be utilised for investing in marketing, sales, expand manufacturing facility for meeting expected requirement as well as accelerate product development, cover operating costs and borrowing repayment.

The Company will list on the ASX with approximately NZ$18.7 million gross profit and product revenue of nearly NZ$22.0 million in the fiscal year 2020 (March year-end). Furthermore, Aroa reported positive EBITDA during the period.

Additionally, the Company notified that at the listing, Brian Ward, Founder and CEO of Aroa would have 11% shareholding.

Endoform® Technology of Aroa Biosurgery

Aroa Biosurgery is engaged in enhancing the quality and rate of healing in complex wounds as well as for soft tissue reconstruction. From over ten years of R&D, the Company developed Endoform®, which is a proprietary soft tissue regeneration technology platform of Aroa.

This technology platform is derived from sheep (ovine) forestomach and comprises a basement membrane layer as well as supportive connective tissue (propria-submucosa). This acts as a scaffold to develop new tissue that was damaged due to a disease or injury and allow own cells of the patient to develop into the matrix for building new tissue and re-establish the supply of blood. If the patient continues to cure, this got replaced by their own tissue.

The Company has a total of five commercial products that are approved for sale across the United States centred on the Endoform® technology. These products have been used in higher than 4-million procedures targeting hernia, chronic wounds, soft tissue & breast reconstruction.

Total Addressable Market for Existing Products of Aroa Exceeds US$1.5 Billion

The Company disclosed that overall total addressable market for its current products surpasses nearly US$1.5 billion in the United States, with a further pipeline of new products to be commercialised with an approximation of over US$1.0 billion.

The success of these products in the market arises by the support from peer-reviewed publications along with previous as well as ongoing clinical developments. Additionally, the Company has regulatory clearance of nearly 37 nations and a deep intellectual Property (patent) portfolio.

It is noteworthy that products provided by Aroa are usually 20-60% less costly than other competing biological products and at the same time, offer superior regenerative performance.

Moreover, Aroa Biosurgery intends to expand its sales within its principal markets of the US along with other markets such as Europe, Canada, including some Asian nations where the Company has produced initial inroads. So far, the Company has achieved sales in more than 600 hospitals across the United States and is on contract with significant groups like purchasing organisations as well as some surgical distributors.

Aroa’s Founder and CEO Brian Ward commented: