Irish medical device company Mainstay Medical plans to raise up to €26.4 million in a stock market flotation that will value the company at up to €125 million.

The money raised will fund the ongoing development of its chronic back pain therapy, Reactiv8 – an implantable neuromodulator device designed to strengthen muscles necessary to stabilise the lower spine – which has recently started human clinical trials in Australia.

The company expects the proceeds to fund additional trials in Europe and other costs related to commercialisation of the device this year and next.

Mainstay, which had already announced plans to list on the Euronext market in Paris and Dublin’s junior Enterprise Securities Market (ESM), said it would offer 851,175 shares in the initial public offering at a price expected to be between €20 and €27 a share. That could rise to almost a million shares, depending on demand.

There is also a standard provision to facilitate an over-allotment option of up to 15 per cent, giving the IPO underwriters the option of putting further shares into the market in the 30 days after the flotation.

Assuming the 851,175 shares are issued at the mid- point in the price range, the company said it would raise just over €20 million, valuing it at €100 million, with net proceeds of €16.5 million

Existing venture capital shareholders – including Ireland's Fountain Healthcare Partners – have committed to investing up to €8 million in the offer. None of the existing shareholders will be selling shares as part of the IPO.

There will be no offer of share to the public in Ireland, where the company is based.