www.makosurgical.com
Nasdaq: MAKO
Scheduled for the week of Feb. 11
$76.5 million estimated proceeds
$301.7 million estimated post-money valuation

Nothing cures arthritis like simply removing the troublesome joint and replacing it with a metal prosthesis. Hip and knee replacement surgery isn’t rare, but it isn’t simple, either: if there’s a problem, the patient may lose the use of that joint permanently. As the population ages, demand for joint replacement is likely to increase, so surgeons will want to find ways to handle the volume of surgery while ensuring that patients get the care they need.

MAKO Surgical has a different approach to knee replacement. The company uses a robotically guided surgical arm (using technology licensed from IBM (NYSE: IBM)) that works through a small incision in the knee. It resurfaces the trouble spot and installs a metal covering. This works best for people in the early stages of arthritis. The technology is FDA approved but very new. Six machines have been sold and 181 procedures have been performed commercially using this technique.

The financial results are just as early stage. For the nine months ended Sept. 30, 2007, MAKO posted just $355,382 in revenue (that’s 355 thousand, not million) and lost $13.2 million. One of the venture funders, Z-KAT, is selling a small amount of its position on the offering but will still control 7.02% of the shares after the IPO closes. Neither the other investors nor the officers are selling shares. The first $4 million of deal proceeds will go to IBM under the terms of the licensing agreement; the rest will be used to fund product marketing, research and development.

---You can read the FULL article when you register (registration is free!) or sign-in to SmallCapInvestor.com---