(AP) — Kips Bay Medical Inc. said Friday it raised $16.5 million before expenses in a reduced initial public offering of about 2.1 million shares.

The stock hovered at its offering price of $8 in the afternoon, rising as high as 22 cents and falling as much as 24 cents during the trading day.

The Minneapolis company priced the offering at the low end of its expected range of $8 to $10 per share. Kips Bay had previously expected to offer more than 2.7 million shares and raise about $21.2 million based on a midpoint price of $9, according to a registration statement filed with the Securities and Exchange Commission.

Underwriters have a 45-day option to purchase an additional 309,375 shares to cover excess demand. It

Kips Bay is a development-stage medical device company that makes a mesh sleeve designed to support vein grafts in coronary artery bypass grafting surgery. It started selling the product in some European Union markets last June, and it expects to start U.S. clinical trials in the first half of this year.

The company will use offering proceeds to fund the process of seeking U.S. regulatory approval and for development and testing for additional applications of the product, labeled eSVS MESH. It also plans to fund milestone payments tied to acquired intellectual property.

Shares are trading under the ticker symbol “KIPS” on the Nasdaq Global Market.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)


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