No operating companies went public this past week, but four new health care IPOs were added to the calendar.
Another blank check for oil & gas
Originally targeting a $130 million IPO in late February, blank check company KLR Energy Acquisition (KLREU) raised $80 million in a further downsized offering. Led by the former CEO of EPL Oil & Gas, its IPO follows that of Mark Papa's Silver Run Acquisition (SRAQU), another SPAC focused on distressed energy assets. While SPACs are not included in our IPO stats, three have raised $569 million this year - 26% more capital than the five IPOs year-to-date.
Four health care companies set IPO dates
Five health care IPOs have priced this year, and five more are now on the IPO calendar for the second half of March. Four of the deals launched this past week, including two biotechs and two medical device companies without little or no revenue. The largest and most notable is Corvus Pharmaceuticals (CRVS), a preclinical checkpoint immunotherapy biotech backed by OrbiMed, Fidelity and others.
IPO market has another positive week
The S&P 500 gained 1% this past week while the Renaissance IPO Index traded up 0.6% after its 16% rise in the prior three weeks. Of the 2015 IPO class, 73% are trading below issue. The VIX Volatility Index finished Friday at 16.50, its lowest close this year. However, the five small-cap biotechs that have priced this year have had very erratic trading. Each currently trades above issue, but these "quasi-IPOs" had heavy support from insiders, reducing the tradable float.
IPO Pipeline update
Initial filing activity has been slow this year - there were none this past week - though three notable companies updated their year-end financials: exchange operator BATS Global Market (BATS; $300mm est. deal size), gene therapy biotech Audentes Therapeutics (BOLD; $86mm deal size) and immunotherapy biotech Bavarian Nordic (BAVN; $86mm).
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 10% year-to-date, compared to -1% for the S&P 500. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Synchrony Financial (SYF), Alibaba (BABA) and Citizens Financial Group (CFG). The Renaissance International IPO Index is down 6% year-to-date, compared to -1% for ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF Holdings include NN Group and Recruit Holdings.
