Investors that missed out on the IPO for medtech company 4D Medical (ASX: 4DX) have had no qualms buying the stock on market with shares in 4DX opening at $1.47 when trading commenced this morning, more than double the IPO Offer Price of $0.73.
The significant jump follows a similar trend among Australian investors that have jumped onboard medical IPOs, some of which have been riding the COVID-19 wave.
In the case of 4D Medical, the US-based Company has spent the past 15 years developing lung imaging software which allows medical professionals to convert images into 4D data which enhances their patient diagnostic capabilities. Not explicitly targeting COVID-19, the software can be applied to helping in the early diagnosis of respiratory diseases such as asthma, chronic obstructive pulmonary disease (COPD) or lung cancer.
Although headquartered in California, 4D Medical was founded in Australia by Dr Andreas Fouras who previously was a mechanical engineering professor at Monash University before moving to company to the United States. In March 2020, 4D Medical’s imaging software become the first of its kind to be granted regulatory approval from the US Food and Drug Administration (FDA) for commercialisation.
Having initially anticipated trading on the ASX on 14 August, the Company bought their opening day forward one week having allotted the $56 million it had been seeking to raise via IPO earlier than expected. So oversubscribed was the IPO, Dr Fouras confirmed that no investors were allotted their full IPO bid amounts.
Buying into the COVID-19 connection, investors have shown confidence in 4D Medical’s view that the virus will create a significant and permanent increase and demand for lung health assessments.
Listed in the first release of 4D Medical’s Top 20 shareholders, Dr Fouras has maintained a 24.49% stake in the 4D Medical. Prior to commencement of trade today, the Company was valued at $193 million based on the $0.73 IPO price.
Within the first hour of ASX trade, 4DX shares traded as high as $1.54.
In recent months, medical IPOs on the ASX have thrived as evidenced by Atomo Diagnostics (ASX: AT1) which opened in April at $0.39 off a $0.20 IPO price and Aroa Biosurgery (ASX: ARX) which opened at $1.40 off a $0.75 IPO price in July.
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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