This week’s three IPOs raised a combined $263 million. Continuing a streak of outperformance from larger IPOs, contract research organization Medpace led with a 21% gain, while Protagonist Therapeutics was the latest biotech IPO to break issue.
Currently in the middle of its annual summer hiatus, the IPO market saw no new filings or launches this week. Since the IPO market began opening in the 2Q, 23 companies have raised over $100 million; their average return is 44% (S&P 500 up 5% since April 1) and all are above issue.
Medpace proves outsourcing is in
Medpace Holdings (MEDP), a global full-service CRO, raised $161 million by pricing at $23, the top of its range. The company specializes in the lucrative but higher-risk small/mid-sized biopharma sector but investor concerns about Medpace’s focus may have been put at ease by the company’s plans to increase its presence with large pharmas, which tend to be more stable. Medpace offers industry leading EBITDA margins, double digit growth and lower debt than its peers. It came to market at a multiple below its peer average.
Not the protagonist of its own story
Protagonist Therapeutics (PTGX) completed an upsized $90 million IPO (45% insider), pricing at the midpoint. Though it raised 29% more than expected, it dropped 2.5% on its first day. Protagonist currently has two candidates for inflammatory bowel disease in early clinical trial stages. Since April 1, 14 biotechs have gone public, all but one are trading below their issue price.
Airgain (AIRG) raised $12 million at a market cap of $65 million, closing flat on its first day after pricing below its range. Providing antenna components for wireless devices, Airgain has experienced stalling sales growth over the past 2 years, while EBITDA fell by over 50% in 2015.
| IPO Pricings Week of August 8th, 2016 | |||||
| Issuer Business |
Deal Size ($mm) |
Market Cap ($mm) |
Price vs. midpoint |
First-day return |
Return at 8/12 |
| Medpace Holdings (MEDP) | $161 | $925 | +7% | +21% | +22% |
| Global full-service CRO focused on small and mid-sized biopharmaceuticals. |
|||||
| Protagonist Therapeutics (PTGX) | $90 | $210 | 0% | -3% | -4% |
| Developing peptide-based oral drugs for inflammatory bowel disease. |
|||||
| Airgain (AIRG) | $12 | $65 | -16% | 0% | 0% |
| Supplies embedded antennas for Wi-Fi routers and other electronic devices. |
|||||
Follow us on Twitter (@IPOtweet) for IPO news as it happens and register for our updates on the IPO market.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is flat year-to-date, while the S&P 500 is up 8%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA), Synchrony Financial (SYF) and Citizens Financial Group (CFG). The Renaissance International IPO Index is down 1% year-to-date, compared to +4% for ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include NN Group and Aena S.A.
