Medical-device company to raise about $15M in IPO

An Indiana medical-device company that is developing electrical-nerve stimulation therapies for children is planning to go public this spring, with a proposed $15 million initial public offering.

Neuraxis Inc. said it will use the proceeds to ramp up its sales and marketing efforts, along with research and development and other functions.

The company, based in Versailles and with an office in Carmel, has a product called IB-Stim, a non-surgical device that modulates the central nervous system using “gentle electrical pulses to nerves below the skin,” according to the company’s registration statement, filed on Feb. 6.

The U.S. Food and Drug Administration has approved use of the device in patients 11-18 years old with functional abdominal pain associated with irritable bowel syndrome. The company is seeking additional approvals for treatment of chronic nausea, chemotherapy-induced nausea and vomiting, and cyclic vomiting syndrome.

Like many technology start-ups, Neuraxis has racked up annual losses since its inception, including a net loss of $3 million in 2021 and $3.7 million in 2020. It said it needs more capital to help fund its growth.

“We believe net sales will increase as we ramp up our marketing efforts and as our IB-Stim device is cleared by the FDA for other indications,” the company said in its registration statement.

Neuraxis is planning to offer 1.87 million shares priced between $7 and $9, which would raise around $15 million if priced at the midpoint.

The company said that after deducting the underwriting discounts and the estimated offering expenses, it would get about $13.3 million of the proceeds.

It plans to use $5 million for sales and marketing, $3 million for research and development, $3.5 million to repay debt, $1.2 million for payments on executive officer contracts, and about $555,000 for general corporate purposes.

The company was founded in 2011 under the name of Innovative Health Solutions Inc. and changed its name to Neuraxis last year. It originally received FDA approval to market devices to help treat opioid withdrawal symptoms amid an epidemic of opioid abuse, which includes both illegal narcotics like heroin and prescription painkillers.

The company developed a device worn behind the ear, where electrodes stimulate nerves in the brain and spinal cord to help relieve addiction symptoms. It licensed the addiction device to Masimo Corp. in 2020  and received a one-time licensing fee of $250,000.

Masimo markets and sells the device as its Masimo Bridge. In its registration filing this month, Neuraxis said it will not receive any further licensing payments or other revenue from this product.

The company intends to list its shares on Nasdaq under the symbol NRXS. Alexander Capital is serving as lead underwriter.