NZ company seeks funds for roll-out in A$35m IPO

CEO Garth Sutherland says the ASX has more capital. Photo / Sarah Ivey

Adherium, a New Zealand medical devices company, wants to raise as much as A$35 million from Australian and Kiwi investors in an initial public offering on the ASX, to help fund the commercial roll-out of its product and continue research and development.

The Auckland company, formerly known as Nexus6, develops and manufactures digital health technologies that improve medical adherence and patient health outcomes for those with chronic diseases. Its first product platform, Smartinhaler, has a number of approved inhalers for asthma sufferers that also collect and report data on usage.

The 14-year-old company is seeking to issue up to 70 million shares at A50c a share. Based on the maximum subscription, the market capitalisation of Adherium upon listing would be A$70 million.

When the company lodged its prospectus this week, it already had A$25.85 million committed, including a cornerstone investment of US$3 million from key client Astra Zeneca.

It signed a long-time partnership with Astra Zeneca last month that will see the big pharmaceutical company incorporate Adherium devices within its global patient support programmes for people with asthma and chronic obstructive pulmonary disease (COPD).

The company's board said Adherium was not expected to be profitable or in a position to pay dividends in the immediate future and it had incurred losses of about $6 million up until March 31. There were no revenue, profit or cashflow forecasts in the prospectus. Adherium earned revenue of $3 million in the March financial year and its products have been used in over 40 medical-related projects in 29 countries.

Chief executive Garth Sutherland, an experienced engineer who has chronic asthma, said the firm chose a listing in Australia because there was a life sciences and healthcare index on the ASX, good analyst coverage of the sector, and a larger pool of capital to tap into and investors with expertise in the sector.

If the offer is fully subscribed, about A$2.2 million of the IPO proceeds will go towards supplying commercial quantities of Smartinhalers to key customers via its business-to-business distribution model, while A$6.4 million has been earmarked to speed up its international sales and marketing, and a further A$11.7 million allocated for more research and development.