The lull is over. The annual February pause in IPO activity lasted longer than normal, but 2018's record-breaking start now looks ready to resume. This week IPOs began launching and another billion-dollar IPO joined the pipeline.
One IPO priced this week, the first in almost a month. AI-based biotech BioXcel Therapeutics priced at the low end and finished flat at the offer price. Three IPOs and one SPAC are scheduled for the week ahead, including tech unicorn Zscaler.
| 1 IPO During the Week of March 5th, 2018 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 03/09 |
| BioXcel Therapeutics (BTAI) | $60M | $197M | -8% | +0% | +0% |
| Developing new uses of drugs to treat neurological disorders and cancer. | |||||
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Artificial Intelligence smarts investors as biotech finishes flat
BioXcel Therapeutics (BTAI) priced at the low end of its range to raise $60 million. The newly-formed biotech licenses AI from its parent to identify new uses for existing drugs. But that is an unproven technology, and its trials are all early stage. Based on recent IPOs, investors appear more interested in breakthroughs in areas like gene therapy and immunotherapy.
For intelligence that's anything but artificial, institutional investors rely on Renaissance Capital's IPO research platform, IPO Intelligence.
It's getting better all the time
The IPO window is open. Markets raced higher this past week. The Renaissance IPO Index surged 4.0% while the S&P 500 gained 3.5%. The VIX Volatility Index hit a one-month low. The 2018 US IPO class has an average return of 20%, led by three biotechs. The year's two tech IPOs (PAGS, CDLX) also have strong gains.
IPO Filings update: DirecTV Latin America files
Two companies submitted initial filings this past week. AT&T's Latin American DirecTV business Vrio (VRIO) filed for a US IPO that we estimate could raise $1.5 billion. The company booked $5.6 billion in 2017 sales, up 11% from the prior year, with a 22% EBITDA margin. In addition, small-cap California bank OP Bancorp (OPBK) filed to raise $20 million.
| 2 Filings During the Week of March 5th, 2018 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Vrio (VRIO) | $1,500M | Consumer Discretionary | Goldman |
| AT&T spin-off of its Latin American DirecTV satellite TV service. | |||
| OP Bancorp (OPBK) | $20M | Financials | KBW |
| California commercial bank primarily serving Korean-American communities. | |||
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index has returned 6.1% year-to-date and the S&P 500 is up 4.2%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Snap (SNAP) and US Foods (USFD). The Renaissance International IPO Index is up 4.4% year-to-date, while the ACWX is down 1.6%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Orsted (DONG Energy) and ASR Nederland.
