Amendment No. 6 to Form S-1

S-1/A 1 ds1a.htm AMENDMENT NO. 6 TO FORM S-1 Amendment No. 6 to Form S-1

As filed with the Securities and Exchange Commission on July 12, 2005

Registration No. 333-123841

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 6 TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

CRYOCOR, INC.

(Exact name of registrant as specified in its charter)

Delaware

3841

33-0922667

(State or other jurisdiction of incorporation or organization)

(Primary Standard Industrial Classification Code Number)

(I.R.S. Employer

Identification No.)

9717 Pacific Heights Blvd.

San Diego, California 92121

(858) 909-2200

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

Gregory M. Ayers, M.D., Ph.D.

CryoCor, Inc.

Chief Executive Officer

9717 Pacific Heights Blvd.

San Diego, California 92121

Tel: (858) 909-2200

Fax: (858) 909-2350

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Frederick T. Muto, Esq.

Matthew T. Browne, Esq.

Cooley Godward LLP

4401 Eastgate Mall

San Diego, California 92121

Tel: (858) 550-6000

Fax: (858) 550-6420

David W. Pollak, Esq.

Stephanie Gulkin Satz, Esq.

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, New York 10178

Tel: (212) 309-6000

Fax: (212) 309-6001

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: ¨

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JULY 12, 2005

CryoCor, Inc.

3,000,000 Shares

of Common Stock


This is our initial public offering and no public market currently exists for our shares. We expect that the public offering price will be between $11.00 and $13.00 per share.
THE OFFERING	PER SHARE	TOTAL
Public Offering Price	$	$
Underwriting Discount	$	$
Proceeds to CryoCor, Inc.	$	$
We have granted the underwriters the right to purchase up to 450,000 additional shares from us within 30 days after the date of this prospectus to cover any over-allotments. The underwriters expect to deliver shares of common stock to purchasers on , 2005. Proposed Nasdaq National Market Symbol: CRYO




This offering involves a high degree of risk. You should purchase shares only if you can afford a complete loss of your investment. See “ Risk Factors” beginning on page 8.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

LOGO

First Albany Capital

Roth Capital Partners

The date of this prospectus is , 2005

OpenIPO^®: The method of distribution being used by the underwriters in this offering differs somewhat from that traditionally employed in firm commitment underwritten public offerings. In particular, the public offering price and allocation of shares will be determined primarily by an auction process conducted by the underwriters and other securities dealers participating in this offering. The minimum size for any bid in the auction is 100 shares. A more detailed description of this process, known as an OpenIPO, is included in “Underwriting” beginning on page 124.

LOGO

THE CRYOCOR CARDIAC CRYOABLATION SYSTEM FOR THE TREATMENT OF ATRIAL FLUTTER AND ATRIAL FIBRILLATION

ATRIAL FLUTTER

ATRIAL FIBRILLATION

In atrial flutter, cardiac cells perpetuate electrical impulses that can be as rapid as 300 impulses per minute.

Our CryoBlator™ Catheter is placed into the right atrium where the system reduces the catheter tip temperature to approximately - 90ºC, the target temperature.

Successive freezes by our CryoBlator Catheter create a lesion line to block perpetuation of the electrical impulses that cause atrial flutter.

Paroxysmal (intermittent) atrial fibrillation is typically caused by disorganized electrical impulses originating in the pulmonary veins.

Our CryoBlator Catheter is advanced into the left atrium to the opening of the pulmonary veins.

Our CryoBlator Catheter freezes the tissue around the pulmonary vein to electrically isolate the heart from these abnormal electrical impulses.

NORMAL HEART RHYTHM

Our system has not been approved by the U.S. Food and Drug Administration for the treatment of either atrial flutter or atrial fibrillation.

TABLE OF CONTENTS


Prospectus Summary		1

Risk Factors		8

Information Regarding Forward-Looking Statements		30

Use of Proceeds		31

Dividend Policy		31

Capitalization		32

Dilution		34

Selected Consolidated Financial Data		36

Management’s Discussion and Analysis of Financial Condition and Results of Operations		38

Business		48

Management		85

Certain Relationships and Related Party Transactions		107

Principal Stockholders		111

Description of Capital Stock		114

Shares Eligible for Future Sale		121

Underwriting		124

Legal Matters		134

Experts		134

Where You Can Find Additional Information		134

Index to Consolidated Financial Statements		F-1

You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer and sale is not permitted. You should assume that the information in this prospectus is accurate as of the date on the front cover of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.

PROSPECTUS SUMMARY

This summary highlights selected information appearing elsewhere in this prospectus and may not contain all of the information that is important to you. You should read this prospectus in its entirety, including the information about the shares we are offering as well as the information regarding our business and the detailed financial data. Unless the context requires otherwise, the words “CryoCor,” “we,” “company,” “us” and “our” refer to CryoCor, Inc. and its subsidiary, CryoCor GmbH.

Overview

Our Business

We have developed and manufacture a minimally invasive, disposable catheter system based on our proprietary cryoablation technology for the treatment of cardiac arrhythmias. Cardiac arrhythmias are heart rate and rhythm disorders that cause the heart to pump blood less efficiently, cause potentially debilitating symptoms, and can result in life threatening events such as stroke. We have focused our initial development efforts on designing a system for treating atrial fibrillation, or AF, and atrial flutter, or AFL, the two most common and difficult to treat arrhythmias. Our product, the CryoCor Cardiac Cryoablation System, or our cryoablation system, is designed to treat cardiac arrhythmias through the use of cryoenergy, or extreme cold, to ablate, or destroy, targeted cardiac cells. Unlike heat-based ablation technologies, which can destroy both the targeted cardiac cells and the extracellular material that binds them together, cryoablation leaves the material surrounding the cardiac cells fully intact. As a result, cryoablation may reduce the complications associated with heat-based ablation technologies. Our cryoablation system utilizes proprietary technology that allows it to generate, deliver and transfer high levels of cryoenergy enabling large lesion sizes, shorter procedure times and enhanced system versatility. We believe these advantages provide better therapeutic efficacy and give us a greater ability to treat complex arrhythmias than competing cryoablation technologies.

To date, our cryoablation system has been used at approximately 40 medical centers worldwide, including approximately 25 medical centers in the United States where it has been used on approximately 285 subjects during our clinical trials, and approximately 15 medical centers in Europe where it has been used on approximately 165 subjects during our clinical trials and approximately 600 patients. Our cryoablation system has been approved in Europe for the treatment of supraventricular arrhythmias, including AF and AFL, since 2002. In the United States, we are conducting two pivotal trials to evaluate the safety and efficacy of our cryoablation system for the treatment of AF and AFL. We completed the enrollment and treatment of patients in our pivotal trial for AFL in November 2004 and plan to complete the filing of an application for premarket approval, or PMA, for the treatment of AFL with the Food and Drug Administration, or FDA, in mid-2005. The FDA is aware that we are filing the PMA for the treatment of AFL with our CryoBlator catheter, which was not used during the AFL pivotal trial to treat any patients. As described in two previously filed modules of the PMA filing, our CryoBlator catheter contains modifications in its internal structural elements from our Model 1100 and 1200 catheters that were used during the AFL pivotal trial. Although the FDA is aware of this, the FDA could delay or deny approval of our AFL PMA because no patients were treated with our CryoBlator catheter during the trial. In May 2005, we initiated a voluntary recall in Europe of all of the outstanding lots of our Model 1200 catheter and withdrew the Model 1200 from clinical trial use in our AF pivotal trial under the Investigational Device Exemption, or IDE, previously approved by the FDA. Because our CryoBlator catheter had engineering changes to its internal structural elements, we do not believe it has or will have the same potential for inadequate seals of the joint between the articulation section and the catheter shaft that led to our voluntary recall of the Model 1200 catheter. The circumstances that led to our voluntary recall of the Model 1200 catheter are described in greater detail in “Business—Manufacturing” on page 71.

We are currently enrolling patients in our AF pivotal trial and plan to submit a PMA for AF with the FDA in 2007. We believe our trial for AF is the only pivotal trial of a minimally invasive, catheter-based system for treating AF currently underway in the United States. We do not currently have FDA approval to market our cryoablation system in the United States, and we may not receive it. If our cryoablation system is not approved by the FDA for any indication for commercialization in the United States, we may be forced to cease operations.

Background and Market

The human heart is responsible for the continuous pumping and circulation of blood throughout the body. Each beat of the heart initiates with an electrical impulse that passes through the heart’s electrical system. The spread of the electrical impulse causes the muscle of the atria and ventricles to contract and pump blood. Cardiac arrhythmias occur when there is a disruption in the heart’s electrical system that results in the inappropriate generation or conduction of electrical impulses.

AF, the most common arrhythmia, afflicts over 2.3 million individuals in the United States, where it has been estimated to account for more than $9 billion annually in drug-based therapy and other disease-related healthcare costs. Our cryoablation system, if approved by the FDA, will address that portion of the patient population for whom drug therapy has not proven effective. Because we anticipate that our cryoablation system, if approved, is likely to be approved for use in patients for whom drug therapy has failed, we are not able to estimate the size of the potential market for our cryoablation system, and the $9 billion spent annually on drug-based therapy and other disease-related healthcare costs in treating AF is not necessarily a relevant indicator of the size of our potential market. It is estimated that each year approximately 500,000 new cases of AF occur in the United States. AF is the leading cause of stroke among the elderly, and people afflicted with this condition are at six times greater risk of stroke and two times greater risk of death as compared to the normal population. AFL can lead to, and often coexists with, AF, and is the second most common arrhythmia. In 2000, it was estimated that more than 200,000 new cases of AFL occur annually in the United States.

The current standard of care for treating AF and AFL is chronic drug therapy, which is costly, often ineffective and can have serious side effects. Other existing treatments for AF include surgical procedures and the off-label use of currently available catheter-based ablation devices. We believe these procedures have failed to gain broad market adoption because they require major surgery, can cause serious complications including death, or they lack efficacy.

Our Solution

We believe that our cryoablation system can become the new standard of care for the safe and effective treatment of AF. We believe that our cryoablation system provides a physician with the critical features necessary to create the multiple large, permanent lesions within the heart tissue that are required to safely and effectively treat AF. We believe safety is the principal benefit of our cryoablation system versus drug therapy and heat-based ablation devices, and that our efficacy and the similarity of our treatment to existing physician procedures are our advantages over competing cryoablation systems. In addition, we believe that our cryoablation system may provide clinical advantages in the treatment of AFL and other complex arrhythmias.

Our Strategy

Our goal is to become the leading provider of minimally invasive, catheter-based treatments for complex arrhythmias. The key elements of our strategy include:

•

demonstrating the safety and efficacy of our cryoablation system through our clinical trials;

•

commercializing our products through a direct sales force, a direct-to-consumer marketing effort and third party distributors;

•

leveraging the influence of industry opinion leaders and major medical centers to accelerate physician adoption and market acceptance of our cryoablation system;

•

enhancing features of our cryoablation system, expanding our product lines and acquiring complementary products; and

•

expanding and protecting our intellectual property position.

Risks Affecting Us

We have a limited operating history and no products in commercial distribution in the United States. We have incurred net losses in each year since our inception and expect to continue to incur significant and increasing operating losses, in the aggregate and on a per share basis, for the next several years. We do not currently have FDA approval to market our cryoablation system in the United States, and we may not receive it. If our cryoablation system is not approved by the FDA for any indication for commercialization in the United States, we may be forced to cease operations.

Our business is subject to numerous risks as discussed more fully in the section entitled “Risk Factors” immediately following this Prospectus Summary.

Corporate Information

We were incorporated in the State of Delaware on August 15, 2000 and on August 31, 2000 we acquired assets, including intellectual property, and assumed liabilities from CryoGen, Inc. in exchange for our issuance of Series A convertible preferred stock and common stock to CryoGen. Our principal executive offices are located at 9717 Pacific Heights Blvd., San Diego, CA 92121, and our telephone number at that address is (858) 909-2200. Our website address is http://www.cryocor.com. The information contained in, and that can be accessed through, our website is not incorporated into and does not form a part of this prospectus.

The Offering

Common stock offered by us

3,000,000 shares. Certain of our existing investors, William Blair Capital Partners, Healthcare Equity Partners, MPM Capital and OrbiMed Associates, have indicated an interest in purchasing, either directly or through their affiliates, $12 million worth of the shares offered by this prospectus at the public offering price, but have no legal obligation to purchase any of those shares.

Common stock to be outstanding after this offering

9,889,229 shares

Use of proceeds

We estimate that the net proceeds from this offering will be approximately $31.7 million, or approximately $36.7 million if the underwriters exercise their over-allotment option in full, assuming an initial public offering price of $12.00 per share. We intend to use the net proceeds from this offering to continue the product development of our CryoCor Cardiac Cryoablation System, to complete our ongoing clinical trials, to build sales and marketing capabilities for our cryoablation system, to prosecute and maintain our intellectual property, to produce consoles, to fund our facility, manufacturing and quality system operations, to provide working capital and for other general corporate purposes. See “Use of Proceeds.”

Proposed Nasdaq National Market symbol

CRYO

The number of shares of our common stock that will be outstanding after the closing of this offering is based on approximately 273,995 shares of our common stock outstanding as of April 30, 2005, and excludes:

•

1,105,136 shares of our common stock issuable upon exercise of options outstanding with a weighted average exercise price of $0.96 per share, 211,289 of which were vested and all of which were exercisable as of that date;

•

234,595 shares of our common stock issuable upon exercise of warrants outstanding with a weighted average exercise price of $7.91 per share, all of which were exercisable as of that date. Warrants to purchase an aggregate of 151,104 shares of our common stock with a weighted average exercise price of $8.52 will terminate if and to the extent not exercised prior to the completion of this offering;

•

141,990 additional shares of our common stock reserved for future issuance under our 2000 Equity Incentive Plan as of that date;

•

193,548 shares of our common stock reserved for future issuance under our 2005 Equity Incentive Plan, which we have adopted to become effective as of the effective date of this offering; and

•

267,741 shares of our common stock reserved for future issuance under our 2005 Non-Employee Directors’ Stock Option Plan and 2005 Employee Stock Purchase Plan, which we have adopted to become effective as of the effective date of this offering.

Unless otherwise indicated, all information in this prospectus assumes:

•

the conversion, upon the closing of this offering, of all 291,456 outstanding shares of our Series A convertible preferred stock, all 1,620,368 outstanding shares of our Series B convertible preferred stock, all 4,456,010 outstanding shares of our Series C convertible

preferred stock and all 138,975,873 outstanding shares of our Series D redeemable convertible preferred stock, as of April 30, 2005, into an aggregate of 5,920,024 shares of our common stock;

•

the issuance of 557,837 shares of our common stock that, as of June 4, 2005, were issuable as dividends upon the conversion of our Series D redeemable convertible preferred stock at the closing of this offering. Our Series D redeemable convertible preferred stock cumulates dividends once annually on the anniversary dates of the closings of the issuances of the shares of Series D redeemable convertible preferred stock, which occurred on June 4, 2003 and May 28, 2004, with the dividends payable being based on an annual dividend rate which is currently 8%. If we do not complete this offering and obtain a PMA from the FDA for AFL by August 4, 2005, the annual dividend rate on our Series D redeemable convertible preferred stock will retroactively increase from 8% to 10%, and 139,467 additional shares of our common stock will be issuable as dividends upon the conversion of our Series D redeemable convertible preferred stock. See “Description of Capital Stock — Dividend Rights on Series C and Series D Convertible Preferred Stock” for more information regarding the dividends described above;

•

the issuance of 137,373 shares of our common stock that, as of June 4, 2005, were issuable as dividends upon the conversion of our Series C convertible preferred stock at the closing of this offering. The Series C convertible preferred stock ceased cumulating dividends on June 4, 2005. See “Description of Capital Stock — Dividend Rights on Series C and Series D Convertible Preferred Stock” for more information regarding the dividends described above;

•

a 1 for 31 reverse split of our common stock effective upon the closing of this offering; and

•

that the underwriters do not exercise their option to purchase up to 450,000 shares of our common stock to cover over-allotments, if any.

This offering will be made through the OpenIPO process, in which the allocation of shares and the public offering price are primarily based on an auction in which prospective purchasers are required to bid for the shares. This process is described under “Underwriting” beginning on page 124.

We have registered trademarks for CryoCor and the CryoCor logo in Europe, Japan, Australia and New Zealand. We have also applied for registered trademarks for CryoCor, the CryoCor logo, CryoArm and CryoBlator in the United States and Canada. This prospectus also contains trademarks and service marks of other companies that are the property of their respective owners. OpenIPO is a registered service mark of WR Hambrecht + Co, LLC.

Summary Consolidated Financial Data

We derived the summary consolidated statement of operations data for the years ended December 31, 2002, 2003 and 2004 and the consolidated summary balance sheet data as of December 31, 2004 from our audited consolidated financial statements and notes thereto included elsewhere in this prospectus. The summary financial data at March 31, 2005 and for the three months ended March 31, 2004 and 2005 are derived from our unaudited consolidated financial statements which are included elsewhere in this prospectus. The unaudited consolidated financial statements include, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, that management considers necessary for a fair statement of the results of those periods. The following financial data are only a summary and should be read together with our consolidated financial statements and their related notes, the information under “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The following summary financial data are not intended to replace our consolidated financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected in the future.


	Years ended December 31,									Three months ended March 31,
	2002			2003			2004			2004			2005
	(in thousands, except share and per share amounts)
Consolidated statement of operations data
Product sales	$	281		$	342		$	493		$	157		$	329
Operating expenses:
Cost of sales		2,844			2,649			2,718			658			717
Research and development⁽¹⁾		4,336			6,387			7,978			1,734			1,789
Selling, general and administrative⁽²⁾		2,174			2,260			5,480			932			1,394

Total costs and expenses		9,354			11,296			16,176			3,324			3,900

Loss from operations		(9,073	)		(10,954	)		(15,683	)		(3,167	)		(3,571	)
Interest and other income (expense), net		35			(218	)		(83	)		(26	)		(69	)

Net loss		(9,038	)		(11,172	)		(15,766	)		(3,193	)		(3,640	)
Dividends and accretion to redemption value of redeemable convertible preferred stock		—			(1,641	)		(4,308	)		(704	)		(1,328	)
Cumulative dividends on Series C preferred stock		(902	)		(547	)		(241	)		(60	)		(59	)

Net loss attributable to common stockholders	$	(9,940	)	$	(13,360	)	$	(20,315	)	$	(3,957	)	$	(5,027	)

Basic and diluted net loss per share attributable to common stockholders:
Historical⁽³⁾	$	(530.11	)	$	(635.43	)	$	(769.77	)	$	(177.92	)	$	(71.12	)

Pro forma⁽³⁾							$	(4.08	)				$	(0.80	)

Shares used to compute basic and diluted net loss per share attributable to common stockholders:
Historical⁽³⁾		18,751			21,025			26,391			22,240			70,682

Pro forma⁽³⁾								4,982,428						6,322,007

(1)	Research and development expenses include $385,000 and $191,000 of non-cash stock-based compensation for the year ended December 31, 2004 and the three months ended March 31, 2005, respectively.

(2)	Selling, general and administrative expenses include $664,000 and $200,000 of non-cash stock-based compensation for the year ended December 31, 2004 and the three months ended March 31, 2005, respectively.

(3)

See Note 2 to our consolidated financial statements for information regarding the computation of basic and diluted net loss per share attributable to common stockholders and pro forma basic and diluted net loss per share attributable to common stockholders. The pro forma basic and diluted net loss per share attributable to common stockholders reflects the weighted effect of the assumed conversion of our convertible preferred stock into shares of common stock at the conversion rates in effect for the period presented.


	As of March 31, 2005
	Actual			Pro forma⁽¹⁾			Pro forma as adjusted⁽²⁾
	(in thousands)
Consolidated balance sheet data
Cash and cash equivalents	$	6,679		$	6,679		$	38,359
Total current assets		7,756			7,756			39,436
Total assets		9,370			9,370			41,050
Total current liabilities		2,350			2,350			2,350
Total long-term debt⁽³⁾		6,359			6,359			6,359
Redeemable convertible preferred stock		34,477			—			—
Accumulated deficit		(55,170	)		(55,170	)		(55,170	)
Total stockholders’ equity (deficit)		(33,816	)		661			32,341

(1)

Pro forma to give effect to the conversion, upon the closing of this offering, of all shares of our convertible preferred stock and redeemable convertible preferred stock and accrued dividends thereon into 6,615,234 shares of common stock. The pro forma amounts do not give effect to any exercise of any of the warrants to purchase an aggregate of 151,104 shares of our common stock with a weighted average exercise price of $8.52 that will terminate if and to the extent that they are not exercised prior to the completion of this offering.

(2)

Pro forma as adjusted to give effect to the sale in this offering of 3,000,000 shares of our common stock at an assumed initial public offering price of $12.00 per share, after deducting underwriting discounts and commissions and estimated offering costs payable by us. The pro forma as adjusted amounts do not give effect to any exercise of any of the warrants to purchase an aggregate of 151,104 shares of our common stock with a weighted average exercise price of $8.52 that will terminate if and to the extent that they are not exercised prior to the completion of this offering.

(3)	See Note 4 to our consolidated financial statements for information regarding the issuance of our new long-term debt in March 2005.

RISK FACTORS

Investing in our common stock involves a high degree of risk. You should consider carefully the risks described below and the other information in this prospectus, including our consolidated financial statements and the related notes included elsewhere in this prospectus, before deciding to invest in our common stock. If any of the following risks actually occur, they may materially harm our business and our financial condition and results of operations. In this event, the market price of our common stock could decline, and you could lose part or all of your investment.

Risks Related To Our Business

We have a limited operating history, have a history of operating losses, expect to continue to incur losses and may never become profitable.

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