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Stuart Garfield
Friday, December 12, 2008
Infertility tech firm Invo Bioscience took zesty path to public markets
By Marc Songini
Rodney Brown on NECN: Hacking into medical devices
Beverly-based Invo Bioscience Inc. is looking to address a serious problem — infertility — by implementing a notably offbeat strategy using the public finance market.
Last Friday, Invo went public under the stock symbol EMYS (which stands for Emy’s Salsa Aji Distribution Co. Inc., based in Ellicott City, Md.), through a reverse shell merger. Its shares are trading over the counter. Additionally, Invo in recent months has closed $1.5 million in venture capital funding from Lionshare Ventures LLC, changed its CEO, and has signed agreements for sales in Europe, Pakistan, Canada and other regions.
Invo plans to use the funds to boost its sales efforts and to gain 510k clearance from the U.S. Food and Drug Administration by early 2010, said Kathleen Karloff, who has been CEO since September.
The reverse shell merger was a simple way for Invo to go public, said Christopher Esposito, managing director at Beverly-based Lionshare, a financial backer that also facilitated the merger. This is a tough time to go public, noted Esposito, but with the reverse merger, Invo is now able to go out and seek more financing, and it has a share valuation assigned to it. Emy’s Salsa, in effect, is now Invo, and a stock-ticker name change is anticipated next week, he said.
Invo’s technology and its related procedure rely on a low ovarian stimulation protocol that harvests fewer eggs from a woman than the typical in vitro fertilization method, which produces about 15. In a doctor’s office, the eggs are mixed with semen and a nutrient medium inside a secure inner chamber of the Invocell, a small, clear plastic container. The Invocell is sealed and then placed inside a woman’s vaginal cavity to incubate for three days. Upon the patient’s return to the office, the doctor removes the Invocell, and selects the best embryos and transfers them to the woman’s uterus.
The Invo product and procedure could assist millions of infertile couples who lack access to more traditional and expensive fertility treatments, such as those performed at in IVF centers and labs. “The Invocell can address most infertility issues that an IVF clinic can,” Karloff said. The Invo process could actually act as a complement to existing IVF providers in their satellite clinics, she said.
Other companies that focus on fertilization issues, such as EMD Serono Inc. in Rockland, address certain aspects of infertility, such as creating drugs to stimulate ovarian activity. However, they don’t actually facilitate an incubation process.
The Invo procedure’s estimated cost will be around half of what a typical IVF clinic charges, which is $12,500 per cycle, said Karloff.
One expert in the commercial IVF field noted the process of using a woman’s own body to facilitate the incubation instead of a device in a lab was unique.
“The IVF labs, in essence, are trying to mimic the human incubator,” noted Cathy Boutin, PLI product marketing manager at Cambridge Research & Instrumentation Inc., a Woburn-based company that makes optical imaging systems that allow doctors to monitor IVF processes. “However, a woman is the best incubator,” she said.
Lionshare has already raised $950,000 for Invo and will provide another $550,000 in the next 90 days, said Karloff. In addition to the reverse merger, in the next month Invo plans to hold a private investment in public entities (PIPE) transaction to raise another $3 million. As the company is already selling in Europe, that should sustain it until its estimated break-even date, in about a year.
The backers see this as a plus for the human race.
“With an addressable global market in excess of $66 billion, limited competition, massive profit margins and a management team that is second to none, Invo Bioscience is the perfect storm in regards to an investment opportunity,” said Esposito.
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