Device-Maker BeneChill Seeks to Raise $14.6M Through IPO

BeneChill, a startup established in San Diego eight years ago to develop a rapid-chilling technology to treat patients suffering from heart attacks and brain injury, intends to raise more than $14.6 million through an IPO.

The company needs the cash. In its IPO filing with federal regulators, BeneChill says it generated only $400,000 in revenue from European sales of its device through the first nine months of 2014. Meanwhile, the company says it has incurred significant operating losses every year, and does not expect to be profitable for some time after its IPO.

At the end of September, BeneChill had an accumulated deficit of $54 million and less than $400,000 in available cash. The company says its consolidated financial statements for 2013 includes a note from the company’s independent accounting firm that raises “substantial doubt as to our ability to continue as a going concern.”

If it successfully opens trading on the public markets, BeneChill says it would use the money to advance its RhinoChill system, a lightweight and portable device that emergency medical technicians and others could use to help forestall the brain swelling that typically follows a heart attack or head injury.

RhinoChill device
RhinoChill device

Currently, such intervention doesn’t begin until the patient reaches a hospital, where blood-cooling machines and water-filled blankets can be applied. Benechill’s device delivers a coolant by inserting a nasal catheter tube through the nose and into the intra-nasal passages near the brain

The company says paramedics and hospital emergency and surgical personnel can use the RhinoChill system to initiate brain cooling at controlled levels. According to the IPO filing, some medical research indicates that such cooling also may mitigate migraine headaches.

BeneChill says it received approval for commercial use of its system in Europe in 2011, and commenced sales in Switzerland and Germany last year. The company plans to eventually seek FDA approval, following its assessment of data from planned and continuing clinical trials in Europe and a pre-clinical study underway in the United States.

The company’s biggest investors include HealthCap, a Michigan insurance company that holds a 21.9 percent stake; MedVenture Associates with 17.2 percent, NGN BioMed Opportunity, 16.4 percent; Physio-Control International, 8.4 percent; and Rütli Foundation Solon Medical, 8.2 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.