Visicu Inc., the Baltimore company that develops remote monitoring systems for hospital intensive-care units, expects to raise at least $65 million in an initial stock offering that could value the company for as much as $400 million.
Visicu is planning to sell 6 million new shares at $11 to $13 a share, according to an amended prospectus filed yesterday. An additional 900,000 shares could be sold if demand is high.
Current shareholders - executives and early investors - would continue to hold 23.9 million shares, or about 80 percent of the company, the filing said. At $12 a share, their stake would be valued at $286.8 million - a more than 10-fold return on their initial $26.3 million investment.
If shares sold at $13, the company would be valued at about $400 million.
Visicu initially filed with the Securities and Exchange Commission to go public in November. Company officials declined to comment yesterday, citing regulatory restraints.
The big numbers in the amended prospectus reflect a company that has grown exponentially in the past two years, after five years of scuffling to develop a system and find customers.
Revenue, according to the filing, ballooned to $18.4 million last year, from $5.5 million in 2004 and $2.2 million in 2003. Visicu gets its revenue from licensing and service fees it charges the hospitals to use its system.
It was also Visicu's first profitable year. The company made $10 million, in large measure from tax benefits stemming from losses in previous years. Over the four previous years, Visicu booked $27.2 million in net losses.
As the company became profitable, it declared a one-time dividend, paying out $7.8 million to its top executives and early investors.
The company was started in 1998 by two Johns Hopkins Hospital intensive-care specialists, Brian Rosenfeld and Michael J. Breslow, who are the company's executive vice presidents. Studies showed that intensive-care patients had better results when they were monitored by doctors specializing in that type of care. But estimates are that there are only enough trained and certified "intensivists" to monitor 10 percent to 20 percent of the country's ICU beds.
The Visicu system uses cameras, microphones and monitors that track patients' vital signs to allow a doctor to oversee several intensive-care units at once. In general, the system has been purchased by large hospital systems, which can extend the reach of their intensivists by using remote monitoring at night to supplement bedside care during the day.
Research sponsored by Visicu found that the extra layer of monitoring reduced mortality rates and costs of care by about 25 percent, compared with rates at the same hospitals before they used the Visicu system.
It now has 29 monitoring centers serving 192 ICUs, with 2,460 beds, in 106 hospitals.
Despite the rapid growth, the company faces threats from two legal challenges to its patent, and from large data companies that offer potential competition, according to the filing.
Visicu said in the amended prospectus that it would use the proceeds of the offering to expand sales efforts - it has a sales force of 10 currently - and for more research and development. That might allow the company to modify its system to serve other parts of hospitals, such as emergency rooms, and to seek international customers.
So far, it estimates, it has contracts for systems covering about 5 percent of its potential ICU market in the United States.
Early investors include Sterling Partners, a Baltimore private equity firm, and the Abell Foundation. After the IPO, Sterling will have about a 12 percent stake in Visicu, while Abell will own 4.1 percent. Sterling was co-founded by two local entrepreneurs, Eric Becker, who was a founder of LifeCard International, and Michael Bronfein, a co-founder and former chairman and chief executive officer of NeighborCare, a pharmacy company.
Cardinal Health Partners, a venture capital firm in Princeton, N.J., will also own about 12 percent. Three other venture capital firms will have, put together, a 25 percent stake.
Founders Breslow and Rosenfeld will each own about 3.5 percent. Frank Sample, the chief executive who joined the company in 2001, will have a 4.8 percent stake.
The company has 99 employees, most in its headquarters on East Redwood Street in downtown Baltimore.
Underwriters for the offering are Morgan Stanley & Co. Inc., Wachovia Capital Markets LLC, Thomas Weisel Partners LLC and William Blair & Co. LLC.