Only two IPOs are expected to begin trading this week, both holdovers from last week that had originally been on the calendar for the week of August 4. The IPO market has begun its annual late-August hiatus, as last week's two deals trade just 1% from the IPO price and none are expected for next week.
Zosano Pharma could be the year's 52nd biotech IPO if it prices this week. 
Given that the company delayed its IPO for about two weeks and 41% of biotechs have priced below the range (18% priced above), Zosano could see valuation pushback. Early-stage biotechs like Zosano come under increased pressure when investors lose their appetite for companies that will remain unprofitable and require additional funding in the near future. However, Zosano could attract attention as a former Johnson & Johnson division backed by New Enterprise Associates.
GWG Holdings (GWGH), which has not selected a pricing date, recently downsized its IPO size by 37% and replaced its underwriter. It is now being offered on a best-efforts basis, meaning we will no longer track the IPO and will exclude it from our statistics. Finance IPOs have generally underperformed this year. Year-to-date, 21 companies in the financial services sector have gone public, averaging a 1% total return (2% on the first day and -1% post-IPO), compared to 3.6% for the Renaissance Capital IPO ETF (symbol: IPO).
| Expected IPOs (week of August 11, 2014) | ||||
| Company (Ticker) | Business | Proposed Trading Date | Lead Underwriter | Deal Size ($mm) |
| Zosano Pharma (ZSAN) | Biotech: transdermal osteoporosis treatment |
Wk of 08/18 |
Wedbush PacGrow |
$70 |
| GWG Holdings (GWGH) | Life insurance investment firm | Wk of 08/18 | MLV & Co. | $20 |
GWG Holdings (GWGH), which holds a portfolio of life insurance policies worth over $250 million, plans to raise $13 million by offering 1.0 million shares at a price range of $11.50 to $13.50. At the midpoint of the proposed range, GWG Holdings would command a market value of $76 million. GWG Holdings, which was founded in 2006, booked $30 million in sales over the last 12 months. The Minneapolis, MN-based company plans to list on the NASDAQ under the symbol GWGH. Newport Coast Securities is the lead bookrunner on the deal.
Zosano Pharma (ZSAN), a biotech developing a transdermal delivery system to treat osteoporosis, plans to raise $70 million by offering 6.4 million shares at a price range of $10 to $12. At the midpoint of the proposed range, it would command a market value of $139 million. Zosano Pharma, which was founded in 2007, booked $3 million in collaboration revenue over the last 12 months. The Fremont, CA-based company plans to list on the NASDAQ under the symbol ZSAN. Wedbush PacGrow, Ladenburg Thalmann and Roth Capital are the joint bookrunners on the deal.
Renaissance Capital will have Pre-IPO Research available on each of these upcoming IPOs prior to its pricing.
Last week, there were 2 IPO pricings. Otonomy (OTIC), a late-stage biotech developing sustained-exposure treatments for ear diseases, was the week's winner, ending up 1% from its IPO price.
