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Cardiac device makers Kestra Medical Technologies and Heartflow have reportedly hired advisers to prepare for IPOs as soon as the first half of 2025. This comes amid a fallow period for medical device company IPOs, with just four medical device manufacturers going public in the U.S. over the past three years. However, increased economic confidence and predictions of a burgeoning capital markets activity suggest a renewed IPO market this year.
Will 2025 See a Revival of Medical Device Company IPOs?
2025 could witness an end to the slump in medical device company IPOs. As reported by the Financial Times (FT), the forthcoming IPOs by cardiac device manufacturers, Kestra Medical Technologies and Heartflow, could mark a reversal to the recent IPO drought in the medical tech sector.
Both companies, renowned for their non-invasive cardiac tests, are preparing for IPOs that could occur within the year. This anticipated resurgence follows a period of investor withdrawal from medical device companies due to high interest rates and mediocre performances by other medical firms that went public amid the pandemic.
Heartflow, which terminated a special acquisition company (SPAC) listing in 2022 that could have valued it at $2.8 billion, is notable for a device that diagnoses coronary artery disease. Meanwhile, Kestra specializes in wearable monitoring and defibrillation devices for people with ventricular arrhythmia. In a funding round last July, it raised $196 million.
Recent reports suggest a renewed optimism in the IPO market this year. More positive perspectives have been fueled by a promising pipeline of IPOs, like those of medical supply firm Medline, liquified natural gas producer Venture Global, and cybersecurity company Sailpoint. A thriving capital market, spurred by economic confidence, is projected to boost these private equity-backed companies.
Private equity firms have faced challenges in selling their companies or making them public in the past two years due to high interest rates and market instability. However, many of these businesses have grown significantly. Arnaud Blanchard, global co-head of equity capital markets for Morgan Stanley, has suggested that sponsors are now moving early in the cycle, anticipating extended timeframes for complete exits.
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