IPO news: Here’s what to know when Paragon 28 goes public this week

The medical device industry is witnessing a rebound in 2021 after seeing a dip last year amid the pandemic and it is expected to see significant growth over the coming years. Paragon 28, a player in this segment, is set to go public this week and here are a few things to know about this company:

IPO details

Paragon 28 is slated to go public on Friday, October 15. The company will begin trading on the New York Stock Exchange under the ticker symbol FNA. It will offer 7.8 million shares at a price range of between $15 and $17 to raise $125 million. The IPO will be managed by a group of underwriters led by BofA Securities.

Company intro

Paragon 28 Inc. is a medical device company that focuses on the foot and ankle orthopedic market. The company offers orthopedic solutions, such as surgical implants, for a range of foot and ankle ailments including fracture fixation, bunions, hammertoe, flatfoot and charcot foot, among others.

Most of the company’s products are Class II medical devices cleared by the US FDA for specific indications or Class I exempt for general orthopedic use. None of its products are Class III medical devices. Paragon 28’s product systems include 6,600 implants, 1,200 instruments and 900 disposable and other SKUs.

The company launched 43 new products between 2017 and the first half of 2021. It currently has over 30 product and system offerings in its development pipeline and expect the majority to launch commercially in the next 24 months.

Financials

The company’s net revenue has grown at a compound annual growth rate (CAGR) of 42% during the five-year period from 2015 to 2020. In 2020, net revenues rose to $111 million from $106.3 million in 2019. Net income increased to $3.5 million in 2020 from $3.1 million in 2019.

For the six months ended June 30, 2021, revenues increased to $68.8 million from $45.7 million in the same period last year. Net loss amounted to $2.4 million in the first half of 2021 compared to $4.5 million in the same period last year.

Market opportunity

The global market for surgical implants and devices used in foot and ankle procedures is expected to be approx. $4.3 billion in 2021, and is projected to grow around 7% annually to reach $5.6 billion by 2025. The US is the largest market for foot and ankle procedures, representing approx. 55% of the global market in 2020, and is it also Paragon 28’s largest market for product sales.

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