The company also has a division called Harvard Apparatus Regenerative Technologies which was formed to develop devices which support growing organs outside the body. Though the company has had some success with tracheal replacements, it is still pre-revenue, with the most optimistic estimates of approval anywhere in the world no earlier than 2015. If the company can be successful, the company estimates that tracheal transplants are a $300 million market, but the business will require significant capital investment.
Towards that end, the company has filed for an IPO of Harvard Apparatus Regenerative Technologies. The IPO aims to raise $20 million in a sale of 20% of the company. The new company is expected to trade under the ticker HART. The company will then distribute the remaining 80% of HART to shareholders within 120 days of the IPO’s completion.
It will be difficult for HART to get its product to market without raising additional capital or partnering with a larger corporation. The spinoff may be a first step in positioning the company for such a move. Harvard Bioscience President David Green is a believer as he will be moving to the new firm as CEO. Investors with low risk appetite should hesitate to join him, but may want to take a closer look at the parent company which will no longer be responsible for the funding of this expensive product development.
Disclosure: The author holds no position in any stock mentioned
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