Two health care companies priced their delayed IPOs this week to raise a combined $132 million. In other IPO news, Snap broke below its issue price and the pipeline saw new filings from a high-growth retailer and a fracker, along with an energy withdrawal. Six companies also launched, filling up the calendar for the week ahead.
| 2 IPOs During the Week of July 10th, 2017 | |||||
| Issuer Business |
Deal Size ($mm) |
Market Cap at IPO ($mm) |
Price vs. midpoint |
First day return |
Return at 7/14 |
| Akcea Therapeutics (AKCA) | $125 | $521 | -38.5% | +18.5% | +18.5% |
| Late-stage biotech developing therapies for rare lipid disorders. |
|||||
| Co-Diagnostics (CODX) |
$7 | $68 | -8.4% | -3.2% | -6.5% |
| Commercializing diagnostic equipment for DNA tests. |
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Akcea Therapeutics (AKCA), which was originally scheduled for June 29, raised $125 million. Despite pricing at $8, well below the range of $12 to $14, the company kept the deal size unchanged by adding 6.0 million shares to the offering, including 3.1 million purchased by parent Ionis Pharmaceuticals (Nasdaq: IONS; 20% of the float). Developing therapies for rare lipid disorders, the late-stage biotech traded up 18.5%.
Micro-cap Co-Diagnostics (CODX), which is commercializing diagnostics equipment for DNA tests, priced its $7 million IPO below the range at $6. The Salt Lake City, UT-based company had a net loss of $2.1 million over the last twelve months and plans to begin generating revenue this year. It traded down -6.5% this week.
Ephemeral value? Snap breaks issue
Snap (SNAP), the the year's most high-profile IPO, dipped below its $17 IPO price this week after Morgan Stanley, the lead underwriter, downgraded it to a hold. Snap is now down -8% from its IPO, but the company's poor performance does not reflect tech sector performance overall; 75% of tech companies that IPO'd this year are trading above issue, and the average return for the sector is 21%.
IPO pipeline update: Hot Topic spinoff, a fracker, a SPAC and a withdrawal
Torrid (CURV), a plus-size women's fashion retailer spun out of Hot Topic, filed on Monday to raise $100 million. Private equity firm Sycamore Partners acquired Hot Topic and fast-growing subsidiary Torrid for $600 million in 2013. Hydraulic fracking company BJ Services (BJS) filed on Friday to raise $100 million. I-AM Capital Acquisition (IAMU), an India-focused blank check company, filed to raise $50 million. Lastly, CEBA Midstream LP (CEBA), SandRidge Energy's frack water disposal MLP, withdrew its plans for a $100 million IPO. Just two of the year's 11 energy IPOs are currently trading above issue, and the group averages a return of -8%.
Two other companies updated their filings this week. Venator Materials (VNTR), a manufacturer of titanium dioxide pigments and additives spun out of Huntsman, added underwriters ahead of its upcoming IPO. Contura Energy (CTRA), a coal producer formed out of Alpha Natural Resources' restructuring, also added underwriters.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 22.4% year-to-date, ahead of the S&P 500, which is up 9.3%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Ferrari (RACE) and First Data (FDC). The Renaissance International IPO Index is up 18.8% year-to-date, while the ACWX is up 15.1%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include ABN AMRO Group and Worldpay.
