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

Xconomy San Diego — 

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.