S-1/A: Picard Medical Files Amendment for IPO, Eyes NYSE American Listing

Picard Medical, a medical technology company focused on artificial hearts, has filed an amendment to its Form S-1 registration statement, signaling progress towards its initial public offering and potential listing on the NYSE American.

Summary

• Picard Medical, Inc., a holding company owning SynCardia Systems, LLC, is pursuing an initial public offering.
• SynCardia manufactures and sells the only FDA and Health Canada approved implantable total artificial heart (TAH).
• Over 2,100 SynCardia TAHs have been implanted in 27 countries.
• The company's future vision is to develop a fully implantable TAH as an alternative to heart transplantation.
• Near-term product development focuses on expanding the SynCardia TAH's indication for use from Bridge to Transplantation (BTT) to Bridge to Candidacy (BTC) and long-term use.
• The company plans to expand product sales into more international markets.
• The next-generation Emperor Total Artificial Heart is expected to be fully implantable and is undergoing non-clinical bench testing.
• Acute animal studies are planned for the first half of 2025, with potential FDA approval for Emperor in 2028.
• The company is working to reinstate its CE mark under the Medical Device Regulation (MDR) and plans to reapply during 3Q25.
• The company anticipates FDA approval of an upgraded portable driver system, Freedom+, by the second half of 2025.
• Development of a next-generation pneumatic driver system, Unicorn, is underway, with regulatory testing expected in the second half of 2026.
• The company is addressing cannula tear reports with a design change, expecting to file a 180-day PMA supplement in the third quarter of 2025.
• The company estimates that the net proceeds of the sale of our common stock in this offering will be approximately $ million (or approximately $ million if underwriter exercises the option in full to purchase additional shares of our common stock), based on an assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
• The company intends to use the net proceeds of this offering to obtain additional capital to support our operations, to create a public market for our common stock and to facilitate our future access to the public equity markets.
• The company anticipates that we will use the net proceeds of this offering to support market expansion via a joint venture in China, to fund research and development activities of our products, including the next generation portable driver, next generation hospital driver, and fully implantable system, to build sales, marketing and distribution capabilities for our total artificial heart system, including the costs of additional inventory and expansion of our base of additional drivers; and for general operational expenses, working capital and other general corporate purposes.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While it highlights the company's innovative products and market position, it also acknowledges significant financial challenges and risks associated with regulatory approvals and competition.

Positives

• SynCardia TAH is the only FDA and Health Canada approved implantable total artificial heart.
• The company is developing a fully implantable TAH, Emperor, with potential FDA approval in 2028.
• The company expects FDA approval of the Freedom+ Driver upgrade in the second half of 2025.
• The company is working to reinstate its CE mark under the Medical Device Regulation (MDR) and plans to reapply during 3Q25.
• The company is investing $2.85 million for 60% ownership of SynCardia Medical (Beijing), Inc. to expand into China.

Negatives

• The company has a history of significant losses and expects to continue incurring losses.
• The company's independent auditor has raised substantial doubt about its ability to continue as a going concern.
• The company relies on specialized suppliers and does not have second-source suppliers for the majority of components.
• The company has significant customer concentrations and no long-term exclusive agreements with customers.
• The company voluntarily withdrew its CE certificate under CE MDD in 2022 and terminated our relationship with our CE notified body to migrate from CE MDD to CE MDR, and failure to reinstate our CE certificate under CE MDR or could have a material adverse effect on our business.

Risks

• The company may need to undertake additional clinical trials in order to secure from the FDA an expansion of the indication for the SynCardia TAH from Bridge-to-Transplant (BTT) to Long-Term (LT).
• Failure to reinstate our CE certificate under CE MDR could have a material adverse effect on our business.
• Prior weaknesses in our compliance with post-market surveillance requirements under CE MDD may limit our ability to market or sell products in European markets.
• Many aspects of the SynCardia TAH are no longer protected by patents, and we may be unable to, in the long term, protect our products from competition through other means.
• If we cease our commercial ties or contractual arrangements with either Bimba or Heitek Automation, we will be required to source crucial components for the C2 and Freedom Driver from an alternative supplier, which could have a negative impact on our business and operations if one is not found.
• Our share price may be volatile, and purchasers of our securities could incur substantial losses.
• Our classification as an emerging growth company and a smaller reporting company upon consummation of this offering, could make our securities less attractive to investors.
• We do not intend to pay cash dividends for the foreseeable future.
• Future sales of common stock, or the perception that future sales may occur, may cause the market price of common stock to decline, regardless of our operating performance.
• We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our business, results of operations, and financial condition.
• We could be subject to securities class action or derivative litigation
• If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of common stock may decrease.
• Our common stock has no prior market, and our stock price may decline after the offering.
• Our stockholders may be subject to significant dilution upon the occurrence of certain events, including conversion of our Series A-1 Preferred Shares and certain related party loans into shares of our common stock, which could result in volatility in our stock price.
• An active trading market may not develop or be sustained.
• We intend to rely on certain controlled company corporate governance exemptions following this offering while we search for candidates to serve as independent directors, and accordingly, our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.
• Exclusive forum provisions in our certificate of incorporation (the Charter) could limit our stockholders ability to bring, and increase the costs of, a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or employees.

Future Outlook

The company expects to continue incurring significant expenses and operating losses for the foreseeable future as it continues to sell and market, research and develop and seek regulatory approvals for existing and future products. Furthermore, the company expects to incur additional expenses with transitioning to, and operating as, a public company.

Industry Context

The document provides an overview of the cardiovascular disease market, highlighting the prevalence of heart failure and the limitations of heart transplantation, positioning the SynCardia TAH as a solution for patients with advanced heart failure.

Comparison to Industry Standards

• The SynCardia TAH is compared to LVADs, ECMO, and axial flow percutaneous left ventricular assist devices as alternative therapies for heart failure.
• The document notes that LVADs are approved for long-term use but only support the left ventricle, while the SynCardia TAH replaces both ventricles.
• The document compares the SynCardia TAH to the Carmat Aeson device and the BiVACOR total artificial heart, highlighting differences in approval status, ventricle blood volume, implant size, number of implants, and implant weight.
• The document notes that the average selling price of the Abbott HeartMate 3 (LVAD) is around $120,000, between $20,000 and 30,000 for the Abiomed Impella 2.5 and 5.0 devices (axial flow percutaneous left ventricular assist devices), and around $111,000 for the Getinge CardioHelp device and (ECMO).

Related Party Transactions

• The document details numerous related party transactions, including loans and convertible notes from entities affiliated with company directors.
• Richard Fang, former Chief Executive Officer and current director, has donated the $7.0 million aggregated convertible note, dated July 2, 2024, and the related accrued interest, to the unrelated not-for-profit organizations, Nexus Science Foundation Inc. (Nexus), and Another Dimension Foundation (Another Dimension). Under this donation, Nexus and Another Dimension will each receive 50% of the converted value in registered shares.

Stakeholder Impact

• The company's success is dependent on its ability to obtain regulatory approvals, which will impact its ability to market and sell its products.
• The company's ability to secure reimbursement for its products will impact its ability to generate revenue.
• The company's ability to attract and retain qualified personnel will impact its ability to execute its business plan.
• The company's ability to maintain strong relationships with its suppliers will impact its ability to manufacture its products.

Next Steps

• The company plans to conduct acute animal studies using selected Emperor design prototypes during the first half of 2025.
• The company expects to have an answer from the FDA regarding the submission to remove imminent death and to add BTC to our IFU in the third quarter of 2025.
• The company expects to file a 180 Day PMA Supplement with the FDA when validation activities are completed to address the cannula tears in the third quarter of 2025.
• The company is planning to reapply for an MDR CE mark during 3Q25.
• The company expects to complete the regulatory testing for the Unicorn driver in the second half of 2026.
• The company expects to gain FDA approvals for next generation Freedom and C2 Drivers during the second halves of 2026 and 2027, respectively.
• The company intends to train selected Indian transplant hospitals in the use of the SynCardia TAH, and will initiate the process of importing and storing devices in FTZs.

Key Dates

Keywords

Picard Medical, SynCardia, Total Artificial Heart, TAH, IPO, NYSE American, Medical Device, Heart Failure, BTT, BTC, Emperor, Freedom+, Unicorn, FDA, Health Canada, CE Mark, MDR, PMA, INTERMACS