NZ-based Aroa Biosurgery set to list on the ASX

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New Zealand-based soft tissue regeneration company Aroa Biosurgery has announced it will list on the Australian Securities Exchange (ASX) as part of an initial public offering (IPO) under which it will raise $45 million from investors.

The company said the offer will be comprised of $30 million of primary capital through the issue of 40 million new shares at $0.75 with the remaining $15 million to form part of a sell-down by existing shareholders in the company.

The IPO values Aroa at $225 million with the company expected to commence trading on 30 July 2020 under the code ARX.

The company is focused on improving the rate and quality of healing in complex wounds and soft tissue reconstruction. Over more than a decade of research and development, Aroa has developed Endoform, a proprietary soft tissue regeneration technology platform.

Endoform is derived from ovine (sheep) forestomach. It includes a basement membrane layer and propria-submucosa (supportive connective tissue). It acts as a scaffold to grow new tissue lost or damaged through disease or injury, allowing the patient’s own cells to grow into the matrix to build new tissue and re-establish blood supply. As the patient continues to heal this is replaced by their own tissue.

The company lists on the ASX having achieved product revenue of NZ$22 million in FY2020 (March year-end) and NZ$18.7 million in gross profit. The company said it was also EBITDA (earnings before interest, taxes, depreciation, and amortisation) positive during this period.

Aroa has five commercial products approved for sale in the US-based on the Endoform technology. The company said they have been used in more than four million procedures targeting chronic wounds, hernia, soft tissue and breast reconstruction. This is in addition to a new product development pipeline.

The company said it plans to grow its sales in its principal market of the US as well as in other markets such as Canada, Europe and select Asian countries where it has made early inroads. 

It said funds raised from the IPO will be used to invest in sales and marketing, increase manufacturing capacity to meet anticipated demand and facilitate product development, cover operating costs and repayment of borrowings.

“Since founding Aroa in 2008 we’ve developed the Endoform® platform technology to deliver clinically effective products and a strong pipeline which places the business in an ideal position for continued growth across the US and other global markets,” said Aroa Founder and CEO Brian Ward.

“We have a proprietary technology that is scalable and efficient, targeting significant addressable markets. I’m excited to share the growth in value of the business with both new and current investors as part of this IPO as well as with the committed board, management and staff behind the company.”