S-1/A: Cortigent Eyes $15 Million IPO to Advance Neurostimulation Technologies

Cortigent, a neurostimulation technology company, is seeking to raise $15 million through an initial public offering to fund the development of its Orion visual prosthesis and stroke recovery system.

Summary

• Cortigent, Inc., a company focused on developing neurostimulation systems, is planning an initial public offering (IPO) to raise capital for its research and development programs.
• The company aims to use the funds primarily to advance its Orion visual prosthesis system for the blind and its stroke recovery system for patients with partial paralysis.
• The IPO involves offering 1,500,000 shares of common stock, with an anticipated initial public offering price of $10.00 per share.
• Cortigent has granted underwriters a 45-day option to purchase up to 225,000 additional shares to cover over-allotments.
• Following the IPO, Vivani Medical, Inc., Cortigent's parent company, will retain approximately 77% of the voting power.
• The company intends to list its common stock on the Nasdaq Capital Market under the symbol CRGT.
• Cortigent is currently a pre-revenue company with a history of operating losses and expects to continue incurring losses for the foreseeable future.
• The company's lead product candidates include the Orion visual prosthesis system, targeting an estimated U.S. market of 82,000 individuals, and a stroke recovery system, potentially benefiting up to 195,000 U.S. stroke victims annually.
• Cortigent faces risks related to clinical trials, regulatory approvals, market acceptance, and competition.
• The company's clinical development timelines target launching Orion in early 2029 and the stroke recovery system in late 2029, subject to FDA approvals and adequate financing.

Sentiment

Score: 6

Explanation: The document presents a balanced view. While highlighting the potential of Cortigent's technologies and target markets, it also emphasizes the significant risks and challenges the company faces as a pre-revenue entity in a highly regulated and competitive industry. The sentiment is neutral, acknowledging both the opportunities and the uncertainties.

Positives

• Cortigent is developing innovative neurostimulation technologies with the potential to address significant unmet medical needs.
• The company has an experienced leadership team and a strong intellectual property portfolio.
• The Orion system has received Breakthrough Device designation from the FDA, which may accelerate its development and review.
• The company is targeting large addressable markets with its Orion and stroke recovery systems.
• The company's technology is based on a proven platform, with the Argus II system having provided artificial vision to hundreds of patients.
• The company has completed an early feasibility study of Orion with promising safety and efficacy data.
• The company is planning to work with the FDA to gain agreement on the additional clinical studies that will be required to secure marketing approval for Orion.

Negatives

• Cortigent is a pre-revenue company with a history of operating losses and expects to continue incurring losses for the foreseeable future.
• The company's future success depends on the successful completion of clinical trials, regulatory approvals, and market acceptance of its products.
• The company faces significant competition in the medical device industry.
• The company will require substantial additional capital to fund its operations and growth plans.
• The company's financial statements have been prepared on a going concern basis, and its financial condition creates doubt about its ability to continue as a going concern.
• The company has a limited number of employees and may face challenges in recruiting and retaining highly skilled personnel.
• The company is subject to stringent domestic and foreign medical device regulation, and any unfavorable regulatory action may materially and adversely affect its financial condition and business operations.

Risks

• Cortigent's commercial and financial success depends on its future products being accepted in the market.
• Cortigent may face substantial competition in the future and may not be able to keep pace with the rapid technological changes.
• The results of Cortigent's limited initial trials may not be predictive of future trial results.
• Cortigent will require substantial additional capital to support its clinical trials and growth plans, and such capital may not be available on terms acceptable to it.
• Cortigent's predecessor has never been profitable and Cortigent expects operating losses to continue for the foreseeable future.
• Any failure or delay in completing clinical trials or studies for new product candidates could adversely affect its business.
• If Cortigent or its licensors are unable to protect its/their intellectual property, then Cortigent's financial condition, results of operations and the value of Cortigent's technology and products could be adversely affected.
• Third-party claims of intellectual property infringement may prevent or delay Cortigent's development and commercialization activities.
• Cortigent is increasingly dependent on sophisticated information technology systems, and if it fails to properly maintain the integrity of Cortigent's data or if Cortigent's products do not operate as intended, Cortigent's business could be materially and adversely affected.
• Any revenue from sales of Cortigent products will be dependent upon the pricing and reimbursement guidelines adopted in each country, and if pricing and reimbursement levels are inadequate to achieve profitability, Cortigent's operations will suffer.

Future Outlook

Cortigent plans to commence a pivotal trial for Orion by mid-2026, complete it by mid-2028, and launch in early 2029, and to commence a pivotal trial for the stroke recovery system in late 2027, complete it by mid-2029, and launch in late 2029, subject to FDA approvals and adequate financing.

Management Comments

• The timeline presented represents management's estimate of the time required to complete each stage.
• No assurance can be given that these timelines will prove correct.

Industry Context

Cortigent operates in the competitive medical device industry, facing competition from companies like Pixium Vision, Nano Retina, and Bionic Vision Technologies, as well as universities and research organizations developing alternative therapies.

Comparison to Industry Standards

• The company mentions competitors such as Pixium Vision SA, Nano Retina Inc., and Bionic Vision Technologies, which are developing visual prosthesis technologies.
• MicroTransponder Inc.'s Vivistim is mentioned as a competitor in the stroke rehabilitation space.
• Northstar Neuroscience's previous work in cortical stimulation for stroke recovery is referenced as a benchmark, although their Phase 3 trial failed to achieve statistical significance at the 4-week primary endpoint.
• The Illinois Institute of Technology's Intracortical Visual Prosthesis (ICVP) has been designated as a Breakthrough Device and has advanced to an early feasibility study in the U.S.
• Neuralink company has demonstrated a penetrating electrode cortical implant in animal models and recently announced implanting its first patient with their brain computer interface (BCI) device.

Related Party Transactions

• Cortigent and Vivani have entered into a Transition Funding, Support and Services Agreement in March 2023 by which Vivani will advance funds and provide or cause to be provided the funding and support services that can sustain Cortigent's operations from January 2023, until the earlier of December 31, 2024 or receipt of proceeds from this offering.
• In August 2023 Vivani and Cortigent amended this funding agreement to provide for (i) repayment of $1.5 million from proceeds of this offering and (ii) issuance of a five year promissory note requiring repayment of $2 million at five percent per year upon maturity of the promissory note.
• Vivani has also agreed to provide the services of its Chief Operating Officer, Truc Le, on an interim basis to consult on operations matters, and the services of its Chief Business Officer, Donald Dwyer, on an interim basis to consult on business development matters.
• Cortigent will also be providing to Vivani the services of Edward Sedo, its chief financial officer.
• Vivani guaranteed the prompt payment of all rents and all other sums payable under the lease together with all other terms and conditions to be kept and performed by us under the lease.

Stakeholder Impact

• The IPO will provide Cortigent with the capital needed to advance its research and development programs, potentially leading to new treatments for blindness and stroke.
• The success of Cortigent's products could improve the quality of life for patients with visual impairments and motor disabilities.
• The IPO will provide investors with an opportunity to invest in a company with innovative neurostimulation technologies.
• The company's operations are subject to stringent regulatory requirements, which could impact its ability to bring its products to market.
• The company's success depends on its ability to attract and retain highly skilled personnel.

Next Steps

• Cortigent plans to manufacture and validate new Orion devices for a planned pivotal clinical trial.
• The company intends to commence the pivotal trial for Orion by mid-2026 and complete it by mid-2028.
• Cortigent anticipates manufacturing modified clinical trial devices for the planned Early Feasibility Study (EFS) for the stroke recovery system.
• The company intends to commence the EFS for the stroke recovery system in mid-2026.
• Cortigent plans to commence a pivotal clinical trial for the stroke recovery system in late 2027 and complete it by mid-2029.
• The company intends to obtain FDA clearance and launch Orion on the US market in early 2029 and launch the stroke recovery system in late 2029.

Key Dates

Keywords

neurostimulation, Orion, stroke recovery, visual prosthesis, clinical trials, FDA approval, medical device, Cortigent, IPO, blindness