www.transoma.com
Nasdaq: TSMA
Scheduled for the week of Feb. 4
$63 million estimated proceeds
$289.6 million estimated post-money valuation

Transoma Medical makes implantable monitoring devices used in biomedical research, often to monitor how a drug affects laboratory animals. It is branching out into a bigger market involving bigger animals: implantable devices monitoring human cardiac patients. The Sleuth Implantable ECG Monitoring System, which takes about 15 minutes for a doctor to implant, is used to monitor such factors as blood pressure and heart rate. This helps doctors know what’s really going on with their patients, including how well they are complying with therapy. In October 2007, Transoma received FDA approval to market the device to patients with unexplained cardiac arrhythmia or syncope. Given that 79 million people in the United States suffer from cardiac diseases, the company estimates that the monitoring device market could be $2.1 billion. There is competition; Medtronic, Inc. (NYSE: MDT) has a similar product.

The company has been around since 1984, and it has an accumulated shareholder’s equity deficit of $34.9 million because of years of losses. For the year ended June 30, 2007, Transoma booked revenues of $37.2 million and a loss of $9.1 million. The company is counting on losses to subside as the Sleuth system is accepted by the market. The firm is backed by Polaris Ventures and Canaan Partners, which will hold 34.64% of the stock after the offering and which are not selling any shares. The company’s co-founder and CEO, Brian Brockaway, is planning to sell 96,000 of the 2.1 million shares that he holds, which is less than half of 1%. He will control 11.18% of the company shares after the offering.

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