Carmel startup NeurAxis raises $6.6M in IPO, less than half of its original forecast

NeurAxis, a Carmel medical-device startup, is having a roller-coaster ride this month.

The company, which is developing electrical-nerve stimulation therapies for children, went public this month at an initial price of $6 a share—lower than the range of $7 to $9 a share it announced in February.

But the initial public offering seems to have gotten off to a bumpy start. Since the stock launched on Aug. 9, shares have fallen as low as $4.45 a share, a 26% slide. They have recovered somewhat, and were trading at $5.06 in midafternoon trading today on the New York Stock Exchange.

NeurAxis was hoping to raise about $15 million in its IPO, according to its February announcement, but said this month that gross proceeds are expected to be approximately $6.59 million, before underwriting discounts and commissions and estimated offering expenses payable by the company.

NeurAxis officials declined to say why they lowered their IPO price or why the transaction generated less than half of what they were forecasting just a few months ago.

CEO Brian Carrico told IBJ the company is in a quiet period until Sept. 2 and cannot comment except in its official registration filing with the Securities and Exchange Commission.

“The repricing question is outside publicly available information,” he wrote in an email to IBJ today, in response to an inquiry.

Yet NeurAxis, which posted a net loss of $3 million last year, is sending signals that its lead product is starting to generate seven-digit sales. The company said last week it has generated over $8 million in revenue following the commercial launch of its propriety technology, called IB-Stim.

The product is a non-surgical device that modulates the central nervous system using “gentle electrical pulses to nerves below the skin.” The company developed a device worn behind the ear, where electrodes stimulate nerves in the brain and spinal cord to help relieve addiction and chronic symptoms.

The U.S. Food and Drug Administration has approved the device for pediatric treatment of functional abdominal pain and irritable bowel syndrome. The company is seeking additional approvals for treatments of chronic nausea, post-concussion syndrome, chemotherapy induced nausea and vomiting, and cyclic vomiting syndrome.

“We are pleased to have reached over $8 million in sales of our proprietary IB-Stim technology and look forward to building upon our momentum with the funds received from our recently completed IPO,” Carrico said in a press release on Aug. 17.

Still, the company is not expecting to be swimming in profits anytime soon. It warned investors in a June filing that it expects to incur “significant expenses and operating expenses for the foreseeable future.”

The company was founded in 2011 under the name of Innovative Health Solutions Inc. and changed its name to NeurAxis last year.