Three companies raised $776 million this week, adding to what has been a red-hot May for IPOs. One SPAC also raised $250 million.
Leading the week was IDEAYA Biosciences (IDYA), which rose 12% on its first day and finished the week at +13% from its IPO. The company, a Phase 1 biotech developing targeted therapies for genetically-defined cancers, raised $50 million by offering five million shares at $10 dollars per share well below the $13 to $15 range it had originally set. The deal was bolstered by $30 million of insider buying. IDEAYA's lead candidate has shown clinical benefit in treating metastatic uveal melanoma patients with GNAQ/GNA11 mutations, but it is targeting a small patient population.
Coming in second place, Rattler Midstream LP (RTLR) traded up 10% on its first day before falling back slightly to finish the week at +8% from its IPO. The company, which was formed by Diamondback Energy (Nasdaq: FANG) to own gathering and water-related midstream assets in the Midland and Delaware Basins of the Permian Basin, raised $665 million in an upsized IPO by offering 38.0 million units at $17.50.
Bicycle Therapeutics (BCYC) fell 14% on its first day of trading before making a partial recovery to end the week down 7% from its IPO. The company, a Phase 1 biotech developing novel oncology medicines based on bicycle peptides, raised $61 million by offering 4.3 million ADSs at $14, the low end of the range. Insiders had intended to purchase up to $25 million of the IPO. Bicycle Therapeutics is in the very early stages and its clinical data for treating solid tumors is limited to this point.
Peloton Therapeutics (PLTX) was scheduled to raise $150 million this week but announced that it would be acquired by Merck for $1.05 billion in cash and $1.15 billion in potential milestone payments. The price paid by Merck puts Peloton Therapeutic's valuation well above kidney cancer peer Calithera (Nasdaq: CALA).
| 4 IPOs During the Week of May 20th, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 05/24 |
| IDEAYA Biosciences (IDYA) | $50M | $204M | -29% | +12% | +13% |
| Phase 1 biotech developing targeted therapies for genetically-defined cancers. | |||||
| Rattler Midstream LP (RTLR) | $665M | $2,733M | 0% | +10% | +8% |
| Oil and gas midstream services unit being spun out of Diamondback. | |||||
| GX Acquisition (GXGXU) | $250M | $313M | 0% | +1% | +1% |
| Blank check company led by the managing partners of Trimaran Capital Partners. | |||||
| Bicycle Therapeutics (BCYC) | $61M | $260M | -7% | -14% | -7% |
| Phase 1 biotech developing novel oncology medicines based on bicyclic peptides. | |||||
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12 companies and two SPACS filed this week, making for what could be a very active June, including Endeavor Group (EDR), the global entertainment and talent agency powerhouse that owns the UFC, which we estimate could raise up to $500 million. Health care represented 50% of the filings this week, with six biotechs and a genome sequencing company all putting in their initial filings to go public.
| 14 Filings During the Week of May 20th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Akero Therapeutics (AKRO) | $86M | Health Care | JP Morgan |
| Early stage biotech developing therapies for NASH and other metabolic diseases. | |||
| Atreca (BCEL) | $100M | Health Care | Cowen |
| Preclinical biotech developing immunotherapies for solid tumors. | |||
| BridgeBio (BBIO) | $225M | Health Care | JP Morgan |
| Phase 3 biotech developing therapies for genetic diseases. | |||
| Dermavant Sciences (DRMT) | $100M | Health Care | Jefferies |
| Phase 3 biotech developing therapies for dermatological diseases. | |||
| Flux Power (FLUX) | $16M | Industrials | Roth Cap. |
| Manufactures and sells lithium-ion batteries and storage solutions. | |||
| Prevail Therapeutics (PRVL) | $100M | Health Care | Morgan Stanley |
| Early stage biotech developing gene therapies for neurodegenerative diseases. | |||
| To Prosperity Technology (BCHT) | $8M | Financials | |
| Provides auto loan services for ridesharing drivers in Sichuan, China. | |||
| Endeavor Group (EDR) | $500M | Industrials | Goldman |
| Global entertainment production company and talent agency. | |||
| Personalis (PSNL) | $115M | Health Care | Morgan Stanley |
| Provides a genome sequencing platform for cancer research. | |||
| Stoke Therapeutics (STOK) | $86M | Health Care | JP Morgan |
| Developing therapies that increase gene expression to treat severe genetic diseases. | |||
| Fellazo (FLLCU) | $50M | SPAC | Maxim |
| SPAC targeting the health food and supplement sector in Asia. | |||
| Meten Int'l Education (MEDU) | $100M | Consumer Discretionary | Citi |
| Provides English language education and international study services in China. | |||
| Priam Properties (PRMI) | $100M | Real Estate | BofA ML |
| Newly-formed REIT focused on office properties in the Midwest and Southeast. | |||
| Haymaker Acquisition II (HYACU) | $300M | SPAC | Cantor Fitz. |
| The second consumer-focused SPAC created by the former CEO of Starwood Hotels. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 5/23/19, the Renaissance IPO Index was up 29.9% year-to-date, while the S&P 500 had a gain of 12.6%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Elanco (ELAN) and Okta (OKTA). The Renaissance International IPO Index was up 10.2% year-to-date, while the ACWX was up 9.8%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include SoftBank and Xiaomi.
