Memorandum
Valeritas postponed its ~$75 million initial public offering on the NASDAQ recently; as noted in Closer Look last week, the IPO was originally scheduled for last Friday, March 20. The language “postponed” implies that Valeritas plans to go public at a later point in time, though there are no further details on when – presumably when it can gain investor traction. Certainly, Valeritas is at an early stage of commercialization – the company booked $13.5 million in sales in 2014 through a continued regional rollout – and perhaps more time is needed to prove the business model and future potential. We know patients who love the device and education among them and patients must expand for the positives to become better known (this took time in type 1 as well, until Miss America!) Notably, Valeritas doesn’t need the IPO funds imminently, as the company had $21 million in cash as of December 31, 2014, enough for at least the next 12 months. There are of course some major advantages to staying private, given the administrative hassles of going public and ongoing time required to spend with public investors. The postponement decision enables Valeritas to focus on expanding the business and proving the model without the distractions of being a newly publicly traded company. For more details, please see our February coverage of the S-1 Filing or the company’s amended S-1 Form filed earlier this month.