S-1/A: Cortigent Eyes $15 Million IPO to Advance Vision and Stroke Recovery Tech

Cortigent, a neurostimulation technology company, aims to raise $15 million through an IPO to fund clinical trials and development of its Orion visual prosthesis and stroke recovery system.

Summary

• Cortigent, Inc., a company focused on developing neurostimulation systems, is seeking to raise capital through an initial public offering (IPO).
• The company plans to offer 1,500,000 shares of common stock, with an anticipated initial public offering price of $10.00 per share.
• The IPO aims to generate approximately $12.98 million in net proceeds, or $15.05 million if the underwriters fully exercise their over-allotment option.
• Cortigent intends to use the funds primarily to advance its Orion visual prosthesis and stroke recovery system through research, development, and clinical trials.
• The company's lead product, Orion, is designed to provide artificial vision for the profoundly blind, targeting a U.S. market of approximately 82,000 individuals.
• Cortigent is also developing a stroke recovery system that aims to improve arm and hand function in partially paralyzed stroke patients, addressing a potential U.S. market of 195,000 patients annually.
• The company faces risks related to clinical trial success, regulatory approvals, market acceptance, and securing favorable product reimbursement.
• Cortigent anticipates commencing a pivotal clinical trial for Orion in early 2026, with a potential market launch in 2028, and a pivotal trial for the stroke recovery system in mid-2027, targeting a 2029 launch.
• Vivani Medical, Inc., Cortigent's parent company, will beneficially own approximately 77% of the voting power of Cortigent's common stock after the offering.

Sentiment

Score: 6

Explanation: The document presents a balanced view, highlighting both the potential of Cortigent's technology and the significant risks and challenges the company faces. The sentiment is cautiously optimistic, reflecting the high-risk, high-reward nature of investing in early-stage medical device companies.

Positives

• Cortigent is developing innovative neurostimulation systems with the potential to address significant unmet medical needs.
• The company's Orion system targets a large market of profoundly blind individuals.
• Cortigent's stroke recovery system has the potential to improve the lives of many stroke patients.
• The company has an extensive intellectual property estate with rights to 217 issued U.S. patents and 37 issued European patents.
• Cortigent has Breakthrough Device designation from the FDA for its Orion system, which is intended to accelerate medical device development, assessment, and review.

Negatives

• Cortigent is a pre-revenue company with a history of operating losses.
• The company's future success depends on the successful completion of clinical trials, regulatory approvals, and market acceptance of its products.
• Cortigent faces competition from other medical device companies and research institutions.
• The company will be controlled by Vivani Medical, Inc. after the IPO, which may create potential conflicts of interest.
• 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.

Risks

• Cortigent currently has no commercial products or product revenue and may never become profitable.
• The company'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.
• The company 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, if at all.
• The price of the company's common stock may be volatile, and the value of your investment could decline.
• The company is subject to stringent domestic and foreign medical device regulation and any unfavorable regulatory action may materially and adversely affect the company's financial condition and business operations.

Future Outlook

Cortigent plans to work with the FDA to gain agreement on additional clinical studies required to secure marketing approval for Orion and the stroke recovery system, targeting market launches in 2028 and 2029, respectively, assuming adequate financing and successful trial outcomes.

Industry Context

The announcement highlights Cortigent's position in the competitive medical device industry, particularly in the fields of visual prosthetics and stroke rehabilitation, where companies like Pixium Vision, Nano Retina, and MicroTransponder are also developing innovative solutions.

Comparison to Industry Standards

• Cortigent's Argus II system, while discontinued, achieved FDA approval under a Humanitarian Device Exemption, a feat comparable to other companies navigating the complex regulatory landscape for novel medical devices.
• The company's approach to stroke rehabilitation using cortical neurostimulation is similar to MicroTransponder's Vivistim system, which uses vagus nerve stimulation, but Cortigent believes its technology has the potential to deliver more targeted direct cortical stimulation.
• Northstar Neuroscience's previous efforts in stroke rehabilitation using a single-channel electrical stimulation device provide a historical context for Cortigent's approach, although Cortigent aims to improve upon Northstar's results with its 60-channel device.
• Unlike some competitors like Neuralink and The Illinois Institute of Technology, Cortigent's Orion system is placed on the brain's surface rather than penetrating the brain tissue.

Related Party Transactions

• Cortigent and Vivani have entered into a Transition Funding, Support and Services agreement in March 2023, effective as of January 1, 2023, by which Vivani advanced from that date and will advance funds and provide or cause to be provided to the Company the services and funding that will cover salaries and related costs, rent and other overhead in order to permit the Company to operate in substantially the same manner in which business operations of the Company were previously operated by Second Sight, prior to the formation of Cortigent.
• As part of this funding and support agreement, Vivani has also agreed to provide the services of its Chief Operating Officer, Truc Le, on an interim basis to consult on operations matters, such as manufacturing planning and interactions with contract manufacturers and the services of its Chief Business Officer, Donald Dwyer, on an interim basis to consult on business development matters, such as business modeling and commercial readiness.
• We will also be providing to Vivani the services of Edward Sedo, our chief financial officer.
• We and Vivani have acknowledged that any such services which we provide to the other before the completion of this offering are deemed to be equivalent in value and shall offset the value of the services provided to the other.
• As a result, we each have acknowledged to the other that neither of us shall accrue any service fees or expenses to the other before completion of this offering and that no invoices from one of us to the other shall be required to be submitted.
• In August 2023 Vivani and we 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.
• By this amendment Vivani also agreed that we shall not be obligated to repay any funding support payments that it made to us which exceed a cumulative $3.5 million.

Stakeholder Impact

• Shareholders: The IPO provides an opportunity for new investors to participate in Cortigent's growth, while existing shareholder Vivani retains significant control.
• Employees: The IPO aims to secure funding for continued operations and development, potentially leading to job security and growth opportunities.
• Patients: Successful development and commercialization of Orion and the stroke recovery system could significantly improve the lives of blind and paralyzed individuals.
• Customers: Healthcare professionals and facilities may benefit from access to innovative neurostimulation technologies.
• Suppliers: Contract manufacturing organizations (CMOs) and other suppliers may benefit from increased demand for materials and services as Cortigent scales up production.

Next Steps

• Manufacture and validate new Orion devices for a planned pivotal clinical trial.
• Commence the pivotal trial for Orion in early 2026.
• Complete the Orion pivotal trial by approximately early 2028.
• Launch Orion on the US market in 2028, if successful.
• Manufacture modified clinical trial devices for the planned Early Feasibility Study (EFS) for the stroke recovery system.
• Commence the EFS for the stroke recovery system in early 2026.
• Commence a pivotal clinical trial for the stroke recovery system in mid-2027.
• Complete the stroke recovery system pivotal trial by early 2029.
• Launch the stroke recovery system in 2029, if successful.

Key Dates

Keywords

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