After shelving $69m IPO, Mevion Medical lands $200m, launches China JV

Mevion Medical Systems, which last week shelved plans for a $69 million initial public offering, this week said it raised $200 million from a syndicate of Chinese and U.S. investors and launched a joint venture in the People’s Republic.

President & CEO Joe Jachinowski told MassDevice.com today that Mevion, which makes the S250 proton therapy system, decided it could raise more privately than in the public market. But an IPO is still definitely in the cards, Jachinowski told us.

“Those [new] investors, just like our other investors, at some point will want a liquidity event,” he explained. “It’s definite that we will be looking at an IPO in the future. This just gives us an opportunity to grow the company a bit more privately and hopefully be ready for even a bigger IPO down the road.

“We are in a growth phase, obviously, and as such we needed to raise capital. Once we met these investors, the opportunity to raise more capital and, more importantly, the opportunity to establish a good foothold in the Chinese market was a benefit above and beyond what we would have garnered had we gone with an IPO,” he explained.

The $200 million round was led by China’s HOPU Investments and YuanMing Capital; existing backers Caxton Alternative Management, ProQuest Investments, Venrock and CHL Medical Partners also participated. the proceeds will go toward boosting its manufacturing capacity at its Littleton, Mass., plant, Mevion said.

Asked about Mevion seeking an acquirer, Jachinowski said the company is focused on building out its business and plans to stay off of the red-hot M&A trail.

“M&A tends to be an opportunistic exit. At this juncture, with the infusion of capital, our focus is going to be on growth. Obviously, if somebody comes knocking on the door and there’s a big number there, we’d listen. We’re really thinking about establishing ourselves in a much bigger way outside the U.S. and really moving forward to grow the company,” he said.

The Chinese JV with the lead investors aims to establish a footprint there for the S250 device, rather than a new device designed for the Chinese market, Jachinowski added, estimating the U.S. proton therapy business at about $5 billion annually. The market in China could reach that level over the next 5 years, he said.

“Initially the joint venture in China will allow us to have a local sales, marketing and service presence in China. The emphasis will be on selling our product. We might tailor it some for the Chinese market, but we’ll more or less sell the units we manufacture today in Massachusetts in China,” he said. “We will over time be looking at expanding our product line, but for all intents and purposes the proton therapy market is a global market and doesn’t lend itself all that well to localized products. We expect our product line to expand, but not just specifically for China.”

The company has 4 installed units in the U.S. and more than 20 orders on the books, Jachinowski said.

“We have a good order book and we continue to try to build that order book. At $20-plus million a unit, the order book can grow fairly quickly,” he said.

Mevion won 510(k) approval from the FDA for the S250 device in June 2012, after receiving CE Mark approval in the European Union in March of that year. Last year the company drummed up a $55 million funding round it planned to use to accelerate deployment of the S250 system.

Shortly before announcing the IPO, Mevion, which started out as Still River Systems before rebranding in 2011, announced the Hyperscan feature for the S250 platform. Hyperscan is an intensity-modulated proton therapy designed to allow the precise delivery of radiation and volumetric scanning of the tumor, according to a press release.

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