Insulin Pump Maker Tandem Diabetes Plans to Raise $100M Through IPO

Joining a procession of life sciences IPOs, San Diego’s Tandem Diabetes Care has registered to raise about $100 million through an initial public offering, according to a regulatory filing yesterday. The company plans to trade on the Nasdaq market under ticker symbol TNDM.

Tandem Diabetes, founded in 2006 to develop an innovative insulin pump designed as a consumer friendly “smart” device, is the eighth life sciences company in San Diego this year to publicly disclose its IPO plans.

Generally speaking, the eight account for roughly a fifth of the 39 U.S. life sciences IPOs so far this year. The exact number of total IPO filings is uncertain, however, since new regulations under the JOBS Act make it possible for companies to submit their filings confidentially to the Securities and Exchange Commission for review. San Diego-based Biocept, for example, submitted its IPO confidentially in August before unsealing its plans publicly last month.

Six other San Diego life sciences companies have gone public this year—Conatus Pharmaceuticals (NASDAQ: [[ticker:CNAT]]), Receptos (NASDAQ: [[ticker:RCPT]]), Ambit Biosciences (NASDAQ: [[ticker:AMBI]]), Sophiris Bio (NASDAQ: [[ticker:SPHS]]), Evoke Pharma (NASDAQ: [[ticker:EVOK]]), and Fate Therapeutics (NASDAQ: [[ticker:FATE]])

In its filing, Tandem Diabetes says it has developed its t:slim insulin pump for a market that consists of roughly 6 million insulin-dependant people in the United States.

Tandem Diabetes says its t:slim device, which resembles a smartphone, is the first insulin pump to feature a high-resolution color touchscreen and is the slimmest and smallest insulin pump on the market. The device uses a miniaturized pumping mechanism that draws insulin from a flexible bag in a replaceable cartridge. Conventional insulin pumps rely on a plunger-type mechanism. The company also developed easy-to-navigate software and a Web-based data management application that makes it easier for patients to track their insulin use.

The company began selling the t:slim in the third quarter of 2012, and reported nearly $2.48 million in sales for the year. Over the first six months of this year, Tandem Diabetes had accumulated sales of nearly $11 million, with a gross profit of more than $2.4 million.

But the company said it still operates at a substantial net loss, and expects that will continue for at least the next several years. Tandem Diabetes reported a net loss of almost $26.5 million for the first six months of this year, and disclosed it has an accumulated deficit of $132.5 million.

Tandem Diabetes has raised about $88.7 million in venture funding from firms like Delphi Ventures, which now holds a nearly 27 percent stake, Domain Associates (more than 26 percent), TPG Biotechnology Partners (over 20 percent, HLM Venture Partners (more than 11 percent) and Kearny Venture Partners (over 6 percent).

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.