Aroa Biosurgery Ltd (ASX: ARX) knocked the lights out on its ASX opening day debut on Friday.
The New Zealand-based medical company entered the Australian market on the final day of trading last week. It sold 40 million new shares at an initial offering of 75 cents per share, raising $30 million. Early investors sold another $15 million worth of shares.
New investors clearly saw that as a bargain. By 11.10 am (AEST) on Friday, the Aroa share price had more than doubled to $1.52. By the closing bell, Aroa shares had declined slightly, finishing the day at $1.35. Still a healthy 80% daily gain.
As you'd expect, Aroa founder and CEO Brian Ward was elated by the results. He told AAP, "We knew after the roadshow that we had good institutional demand, we knew today would go well, but it's been surprising how well it's gone. … It's been quite a party."
What does Aroa Biosurgery do?
Aroa is a soft tissue regeneration company focused on improving wound healing. Its regeneration platform, Endoform, is developed from sheep forestomach.
The company says that Endoform is 20% to 60% less expensive than similar biological products manufactured by its competitors. Its products have been used in more than 4 million procedures at 600 hospitals.
What next for Aroa?
Aroa doesn't plan to sit on its laurels. The company intends to use its initial public offering (IPO) funds to expand into the massive United States (US) market. It already has 5 commercial products approved for sale in the US.
Today, the Aroa share price closed trading at $1.47, up another 8.89% from Friday's close.
While it would have been nice to get your hands on some shares at 75 cents, we may well look back at the current price of $1.47 as a grand bargain in a year's time.
