No IPOs priced during the shortened holiday week, but new filing activity remained strong: there have been 15 filings over the past two weeks, signaling a busy October. Six companies set terms this week, including Alibaba-backed logistics firm Best (BSTI), Latin American online travel agency Despegar.com (DESP), mortgage REIT Tremont Mortgage Trust (TRMT) and three micro-cap biotechs.
2017 IPO performance continued to rally; the YTD average total return is 20.5% from the IPO price, including 9.3% from aftermarket trading. Biotechs, in particular, fueled the recent run-up; this year's 20 biotech IPOs average a total return of 39.7% with aftermarket returns of 27.7%.
| 9 Filings During the Week of September 4, 2017 | |||
| Issuer Business |
Deal Size ($mm) |
Sector | Lead Underwriter |
| Loma Negra (LOMA) | $500* | Materials | BofA Merrill Lynch |
| Leading Argentine cement producer. |
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| Switch (SWCH) | $300* | Technology | Goldman Sachs |
| Operates data centers and provides data management systems. |
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| MPM Holdings (MPMH) | $200* | Materials | TBD |
| Restructured global producer of specialty silicones and other chemical additives. |
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| Rhythm Pharmaceuticals (RYTM) | $115 | Health Care | Morgan Stanley |
| Clinical-stage biotech developing peptide-based therapies for genetic obesity. |
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| Hancock Jaffe Laboratories (HJL.RC) |
$15 | Health Care | Network 1 Financial |
| Developing bioprosthetic devices for cardiovascular surgeries. |
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| Adial Pharmaceuticals (ADIL) |
$14 | Health Care | Aegis Capital |
| Developing a targeted therapy for alcohol use disorder based on an approved drug. |
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| *Deal size is RC estimate | |||
US IPO Pipeline Update
Six companies joined the IPO pipeline, expecting to raise a combined $1.1 billion. Argentine cement producer Loma Negra (LOMA) plans to raise an estimated $500 million; the company plans to sell shares in both Argentina and New York. Intel-backed data center operator Switch (SWCH) filed to raise an estimated $300 million. During the 1H17, the company posted 17% revenue growth ($181 million) as customer count rose 10% to 808 at period-end. Momentive (MPMH), a restructured global producer of specialty silicones, ceramics and quartz, plans to raise up to $100 million; it is currently listed on the OTC Markets under the ticker MPMQ and closed on Thursday with a market cap of $778 million. Rhythm Pharmaceuticals (RYTM), a clinical-stage biotech focused on peptide-based therapeutics to treat genetic obesity, plans to raise up to $115 million. The company successfully sold its last development drug, relamorelin, to Allergan in 2014 for $200 million after positive phase 2 results. Bioprosthetic device maker Hancock Jaffe Laboratories (HJL.RC) and alcohol-abuse biotech Adial Pharmaceuticals (ADIL) filed to raise $15 million and $14 million, respectively.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 25.6% year-to-date, ahead of the S&P 500, which is up 9.9%. 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 24.0% year-to-date, while the ACWX is up 18.7%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include ABN AMRO Group and Worldpay.
