Senseonics Holdings (Pending:SENS) expects to raise at least $55.5 million in its upcoming IPO. Based in Germantown, Maryland, Senseonics Holdings is a medical technology company that designs, develops and commercializes glucose monitoring systems for use by people with diabetes.

We previewed SENS on our IPO Insights platform earlier last week. SENS currently trades on the OTCBB under symbol SENH.

SENS will offer 18.2 million shares at an expected price of $3.10 to $3.50. If the underwriters price the IPO at the midpoint of this range, Senseonics will have a market capitalization of $60 million.

SENS filed for the IPO on January 13, 2016.

Lead Underwriters: Cannacord Genuity and Leerink Partners

Underwriters: BTIG LLC, and Raymond James & Associates

Business Summary: Medical Technology Company Developing Glucose Monitoring Systems

Senseonics Holdings is a medical technology company, focused on the design, development, and commercialization of glucose monitoring systems for diabetics. Its first generation continuous glucose monitoring system (CGM), Eversense, measures glucose levels in people with diabetes.

Eversense is an implantable, long-term CGM system that is intended to accurately measure blood glucose levels on a continuous basis for up to 90 days, which is much longer than current CGM systems that can measure glucose levels for five to seven days.

The traditional method of measuring blood glucose levels involves lancing a fingertip with a fingerstick, several times per day and night, to apply a drop of blood to a test strip, which is then read by a blood glucose meter.

The company expects users to find Eversense a more convenient, less painful method than traditional fingersticks. In its European clinical trials, Eversense measured blood glucose levels for 90 days with accuracy that was comparable or superior to other available CGM systems. Senseonics intends to begin selling Eversense in several European markets in the first half of 2016. The U.S. Food and Drug Administration gave the company an investigational device exemption to begin clinical trials in the United States, which Senseonics initiated in the first quarter of 2016.

Diabetes is a serious, chronic and life-threatening disease, which can be managed but not cured. The disease is a result of the body's inability to either produce or effectively utilize insulin. The causes inadequate regulation of blood glucose levels, which lead to complications such as limb amputations, blindness, heart disease, seizures, loss of kidney function, comas and death. According to the International Diabetes Foundation, the number of diabetics worldwide is expected to grow from 387 million people in 2014 to 592 million by 2035.

Executive Management Overview

CEO, President and Director Thomas Goodnow, Ph.D. has served Senseonics since December 2015. His previous experience comes from senior positions at Abbott Diabetes Care, Inc., Verax Biomedical, ZymeQuest, and Baxter Healthcare. Dr. Goodnow holds a B.S. and Ph.D. in Chemistry from the University of Miami.

CFO, Secretary and Treasurer Don Elsey joined Senseonics in December 2015. His previous experience includes positions at Regado Biosciences, LifeCell, Emergent BioSolutions, IGEN International, and IBM. Mr. Elsey is a Certified Management Accountant and received an M.B.A in Finance and a B.A. in Economics from Michigan State University.

Potential Competition: Medtronic, Abbot, Johnson & Johnson

Due to the considerable number of people with diabetes around the world and the need to manage the disease for life, the market for products designed to serve diabetics is highly competitive. Senseonics faces direct competition from other companies that have developed or are working to develop CGM systems, including Dexcom (NASDAQ:DXCM), Johnson & Johnson (NYSE:JNJ), Abbot (NYSE:ABT), Tandem Diabetes Care Inc. (Nasdaq:TNDM), and Medtronic (NYSE:MDT), among others.

Financial Overview: Net Losses Stable At This Early Stage

Senseonics Holdings provided the following figures from its financial documents for the year ended December 31:

As of Dec. 31, 2015:

Conclusion: Consider Holding Off

With no products yet approved for commercial sale, heavy dependence on lead product Eversense, and significant losses since inception, we are hesitant to invest in this company at such an early stage.

While an important market, diabetes has drawn stiff competition with more well developed product lines.