This past week, the set of small health IPOs that had been languishing on the IPO calendar either postponed or went public.
• Two small health IPOs raised a combined $52 million
• Two small health IPOs postponed indefinitely
• Just one best-efforts IPO on the calendar for next week
• Higher filing activity suggests a busy March
Eye drop biotech drops valuation
Inotek (ITEK) slashed its price by 57% from the midpoint, a larger discount than 99% of 2014 IPOs. It raised $40 million in the offering (45% insider) and issued $20 million in convertible debt but the glaucoma biotech gained 1% by Friday.
Small capsule maker becomes microcap stock
Check-Cap (CHEKU) is developing a small ingestible capsule that uses low-dose X-rays to scan for colorectal cancer and, unlike competitors, it does not require a colon cleansing first. It added warrants and incentive rights, priced at a 45% discount to the original midpoint and traded up just 2% by Friday.
| IPO pricings (week of February 16, 2015) | |||||
| Company (Ticker) | Business | Deal Size ($mm) | IPO Price vs. Midpoint | First-Day Pop | Return as of 2/13 |
| Check-Cap (CHEKU) | Ingestible capsule for colorectal cancer | $12 | -45% | 0% | 2% |
| Inotek (ITEK) | Glaucoma biotech | $40 | -57% | 1% | 2% |
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Filing activity signals a moderately busy March
Just one best-efforts IPO is on the calendar for next week, Wowo (WOWO), as companies update their year-end financials. Six companies submitted initial filings this past week and eight were added to the pipeline in the prior week. Large additions include Blackstone's PGI Specialty Materials (PGIS.RC), oil refinery Philadelphia Energy Solutions (PESC) and EQT GP Holdings LP (EQGP). Growth filers included semiconductor designer eASIC (EASI) and Arcadia Biosciences (RKDA). GoDaddy (DADY.RC), Black Knight Financial Services (BKFS) and Virtu Financial (VIRTU) also appear ready to launch.
IPO market snapshot
The Renaissance IPO Index, a market cap weighted basket of newly public companies that is designed to represent the US IPO market, has traded up nearly 6% year-to-date. For the second week in a row, it closed at an all-time high. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Zoetis (ZTS), Twitter (TWTR), Alibaba (BABA), Hilton (HLT) and Ally Financial (ALLY). To find more about purchasing shares of the ETF from your broker, visit our new IPO investing page.
