IRVINE — Shares of Biopsys Medical Inc. jumped 26% in their first day of trading Wednesday as investors clamored to grab a piece of the newest player in the medical cost-containment market.
Biopsys, which opened its doors just three years ago, makes a needle biopsy system for the diagnosis of breast cancer.
The company's stock closed at $18.875 in heavy trading Wednesday on the Nasdaq market, up $3.875 for the day. Nearly 2.3 million shares changed hands. On Tuesday, Biopsys netted $36 million by issuing 2.5 million shares at $15 each to the underwriters of its initial offering.
The stock took off as soon as public trading began Wednesday and rose as high as $19 a share.
The entire medical industry is being turned upside-down by the drive for low-cost alternatives to traditional diagnostic and treatment methods, and companies like Biopsys are well-placed to profit from the quest, industry observers say.
Biopsys' system enables a physician to take a sample of breast tissue through a hollow needle, eliminating the need to make an incision with a scalpel.
The procedure can be done on an outpatient basis, usually in a clinic. Typically, breast biopsies are done surgically in an operating room--a much more costly procedure.
In addition to the cost savings, Biopsys executives say, the needle biopsy doesn't leave a scar or cause any disfigurement.
Steve Jex, Biopsys president and chief executive, said the company plans to use proceeds from its offering to expand marketing, increase manufacturing and bolster research and development of new products.
He said the company, which lost $1.5 million last year, has been staffing up all year as demand for its Mammotome biopsy system has increased. The company has added 25 employees since January, mainly in manufacturing, and now has a work force of 65. Biopsys began marketing the biopsy system in August.
Jex owns about 3% of the company's 9.33 million shares and the value of his stake had swelled to $5.7 million when trading closed Wednesday.
The 14% holding of Biopsys' largest shareholder, venture capital investor Brentwood Associates, was worth $24.7 million at the end of the day.