UPDATE 3-AGA Medical edges up in Nasdaq debut

* Shares close first day at $14.60, up 0.7 pct

* Shares start trade at $14.50, same as IPO price

* Tuesday IPO raised $199.4 mln

* 11th IPO of 15 since mid-Sept with below average debut (Adds analyst quote, background)

By Phil Wahba

NEW YORK, Oct 21 (Reuters) - AGA Medical Holdings Inc (AGAM.O), a maker of devices for heart defects and blood vessel diseases, became the latest IPO to disappoint in its debut, rising only 0.7 percent in its first day of trade.

AGA shares started trading at $14.50 on the Nasdaq, rose as much as 2.4 percent to $14.85 and ended 10 cents higher for the day.

Historically, U.S. IPO stocks have on average risen 10 to 12 percent in their first day, but AGA Medical became the 11th IPO out of 15 since mid-September to have an sub-par first-day, which came on the heels of the IPO pricing below expectations on Tuesday evening.

AGA priced shares at $14.50, below the expected price range of $15 to $16 a share, which it had lowered earlier Tuesday from $19 to $21.

The company, whose largest shareholder is private equity firm Welsh, Carson, Anderson & Stowe LP, sold 13.75 million shares and raised $199.4 million. As recently as Monday it had estimated it would raise $275 million.

Despite the disappointing pricing, the shares stood their ground in their debut because of company's profit margins and pipeline of products, an analyst said.

"The market opportunity for their pipeline products is about $6 billion and they are highly profitable," said Matt Therian, an analyst with Connecticut-based investment firm Renaissance Capital.

The downward pressure during the pricing came partly from uncertainty over how long regulatory approval for new products and for new applications for existing products could take, he said.

Investors may have also balked after AGA's co-founder Franck Gougeon upped the number of shares he was selling by about 2 million on Tuesday, while AGA itself sold fewer shares, leaving it with less money with which to pay down debt.

"It does not send a vote of confidence when you see pricing pressure and selling shareholders sell more shares," Therian said.

At the share price of $15.50 that AGA had expected, the company would have realized $96 million from the offering, less than the net proceeds of $154.2 million it had originally estimated.