As many as 8 companies could go public in the US during the shortened holiday week.
The week's three high-growth health care IPOs that are on the IPO calendar should receive the most interest, especially after last week's device maker Glaukos (GKOS) priced above the range and finished up 56%.
For a look at the international IPO market, view our new 2Q 2015 Global IPO Review and check back for the US Review early this week.
A stock is born: VC-backed pregnancy tests to go public
Natera (NTRA) plans to raise $100 million, and its proposed $850 million market cap makes it the week's largest company. Backed by Sequoia Capital, Natera claims that its non-invasive pregnancy tests are more accurate than competitors, and can be used 9 weeks in to determine fetal sex and a variety of genetic abnormalities (e.g. Down syndrome). It launched its core test in March 2013, and sales skyrocketed 189% to $159 million in 2014, gross profit rose 19 percentage points to 51% and EBITDA swung positive. Genetic testing companies like Natera have also been racing to develop a highly-lucrative non-invasive blood screen for cancer. Notable M&A includes Illumina's acquisition of Verinata and Roche's acquisition of Ariosa Diagnostics (AROS). Despite these tailwinds, sales have decelerated as its former two largest customers, Quest and Progenity, terminated contracts in 2014 to promote competitive products. The area is also highly litigious, and genetic diagnostics IPOs have faced challenges this year: Invitae (NVTA), Opgen (OPGN) and HTG Molecular (HTGM) trade below the offer price, two IPOs postponed (AGMX, IDGX) and another (RAIN) has delayed its launch. Our IPO poll takers are skeptical.
The new house call: Tell a doctor through Teladoc
Teladoc (TDOC) positions itself as the first public "telehealth" company, offering subscribers the ability to connect with a doctor via phone or internet 24/7 within 10 minutes. With an extensive network of physicians and major contract wins (including Aetna and Pepsi), Teladoc is the #1 player in a rapidly-growing space, and sales rose 75% to $17 million in the first quarter. However, the unprofitable company is still in a transition period: it must improve user utilization to win new contracts, even as the incremental benefit from higher utilization is not particularly beneficial to its bottom line.
The 3D-printed knee
ConforMIS (CFMS) offers the only fully customizable knee replacement, which it manufactures with 3D printing. Sales grew 36% to $15 million in the first quarter, and its total market size could be as high as $15 billion. While fast-growth medical device companies have attracted investor interest, the company comes with a $280 million accumulated deficit and near-term unprofitability as it pitches its products against industry giants like Stryker, Smith & Nephew and Biomet/Zimmer.
Two dividend plays: Mortgage REIT and Coal MLP
Loan Core Realty Trust (LCRT) plans to raise $300 million in its IPO plus $205 million from GIC Private Limited, Jefferies (a bookrunner) and management in a private placement as it targets a market cap of $505 million. It has set an offer price of $20 per share. A bet on Chairman and CEO Mark Finerman, the REIT plans to use IPO proceeds to grow its portfolio of commercial mortgages. CNX Coal Resources LP (CNXC) operates parent CONSOL Energy's (NYSE: CNX) Pennsylvania mining complex. It had planned to go public last week with a proposed annual yield above 10%, before the coal MLP slashed its valuation by 25% on Friday and set pricing as day-to-day. Coal prices have been driven lower by an increased supply of cleaner alternatives, and last year's much larger coal MLP, Foresight Energy LP (FELP), is down 36% from its offer price, -24% year-to-date, -16% in the past three months and -7% in the past month.
Three small-cap IPOs: Auto supplier, anemia biotech and solar project acquirer
Auto supplier Unique Fabricating (UFAB), which has $130 million in annual sales, announced that it would attempt to price its $17 million IPO this week. Two other companies delayed public offerings last week and may try again this week. Backed by OrbiMed, Pieris Pharmaceuticals (PIRS) plans to uplist from the OTCQB to the NASDAQ as it moves into Phase 2 trials for iron deficiency in anemic patients with CKD. Solar asset acquirer Principal Solar (PSWW) hopes to uplist from the Pink Sheets to the NASDAQ.
| Renaissance Capital's IPO Calendar - Week of 6/29/2015 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Lead Manager(s) |
| LoanCore Realty Trust Greenwich, CT |
LCRT NYSE |
$300 | $20 15,000,000 |
Deutsche Bank J.P. Morgan |
| Commercial mortgage REIT backed by Jefferies and GIC. | ||||
| ConforMIS Bedford, MA |
CFMS NASDAQ |
$135 | $14 - $16 9,000,000 |
J.P. Morgan Deutsche Bank |
| Sells fully customized knee replacement implants. | ||||
| CNX Coal Resources LP Canonsburg, PA |
CNXC NYSE |
$120 | $15 8,000,000 |
BofA Merrill Lynch Wells Fargo |
| MLP recently formed by CONSOL Energy to operate its Pennsylvania coal mines. | ||||
| Teladoc Purchase, NY |
TDOC NYSE |
$112 | $15 - $17 7,000,000 |
J.P. Morgan Deutsche Bank |
| Provides on-demand medical care through video/telephone consultations. | ||||
| Natera San Carlos, CA |
NTRA NASDAQ |
$100 | $15 - $17 6,250,000 |
Morgan Stanley Cowen & Company |
| Sells non-invasive prenatal DNA tests. | ||||
| Pieris Pharmaceuticals Freising-Weihenstephan, Germany |
PIRS NASDAQ |
$30 | $3.12 9,615,385 |
Oppenheimer JMP Securities |
| Developing a therapy for iron deficiency in anemic patients with chronic kidney disease. | ||||
| Unique Fabricating Aurburn Hills, MI |
UFAB NYSE |
$17 | $8 - $10 1,875,000 |
Roth Capital Taglich Brothers |
| Provides die cut plastic and foam products primarily used by automobile OEMs | ||||
| Principal Solar Dallas, TX |
PSWW NASDAQ |
$12 | $7 - $9 1,500,000 |
Northland Securities |
| Roll-up planning to acquire 150 MW of solar energy projects in North Carolina. | ||||
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IPO pipeline update: June hits 1-year record with 10 large IPO filings
37 companies have submitted initial filings so far in June, more than any month since June 2014. Ten more were added to the IPO pipeline last week, including seven with a deal size of $200 million or more; none of the prior week's fourteen filings were that large. Two fast-growing PE-backed consumer deals came from discount gym franchisor Planet Fitness (PLNT) and SkinnyPop popcorn-maker Amplify Snack Brands (BETR). Two global packaging companies filed: Ardagh Group's metal can spinoff Oressa (ORES) and Carlyle/Madison Dearborn's paper packaging producer Multi Packaging Solutions (MPSX). Freeport-McMoRan (NYSE: FCX) filed to spin off its oil and gas business (FMOG) in a potentially $1 billion IPO while the second largest residential solar company Sunrun (RUN) could raise $500 million as early as July. With $2.8 billion in sales, leading Caribbean mobile provider Digicel (DCEL) is the month's second telecom filer after Ooma (OOMA). The initial filing of GC Aesthetics (GCAE.RC) may precede an uptick in breast-related puns from Renaissance IPO news writers. Meanwhile Seres Therapeutics' (MCRB) 186% return last week suggests that the biotech frenzy is far from over.
IPO market snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index has traded up 8% year-to-date, compared to 2% for the S&P 500. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA), Twitter (TWTR) and Hilton Worldwide (HLT). The Renaissance International IPO Index has traded up 9% year-to-date, compared to 6% for the ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF Holdings include Altice and Deutsche Annington. To find out if this is the best ETF for you, visit our IPO Investing page.
