US IPO Week Ahead: A wave of biotechs and billion-dollar valuations in 6-IPO week

Six IPOs plan to raise $596 million in the week ahead, with two biotechs targeting billion-dollar-plus valuations.

Swiss biotech ADC Therapeutics (ADCT) plans to raise $200 million at a $1.8 billion valuation. Insiders have indicated on $115 million of the IPO. The company is developing antibody drug conjugates, and its pipeline consists of seven candidates targeting hematological malignancies and solid tumors. Its two lead candidates are in pivotal Phase 2 trials, one of which is in collaboration with Genmab (GMAB).

Viela Bio (VIE), which is developing antibodies licensed from AstraZeneca, plans to raise $150 million at a $1.0 billion valuation. The company's lead candidate, inebilizumab, is a humanized monoclonal antibody designed to target CD19 for neuromyelitis optica spectrum disorder, a rare condition that attacks the nervous system. It could potentially be approved in the 1H20.

Degenerative disease biotech Frequency Therapeutics (FREQ) plans to raise $101 million to command a $526 million market cap. Its lead candidate, FX-322, is being developed to treat sensorineural hearing loss, the permanent loss of sensory hair cells in the cochlea within the ear.

Three smaller deals are also lined up for next week. Aprea Therapeutics (APRE) and Monopar Therapeutics (MNPR) are both Phase 3 biotechs developing therapies for cancer, and MetroCity Bankshares (MCBS) is a Georgia bank focused on serving Asian-American communities in the Eastern US and Texas.

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The following IPOs are expected to price this week:

ADC Therapeutics (ADCT), a Swiss biotech developing antibody therapies for cancers, plans to raise $200 million by offering 8.2 million shares at a price range of $23.00 to $26.00. At the midpoint of the proposed range, ADC Therapeutics would command a market value of $1.8 billion. ADC Therapeutics, which was founded in 2011, booked $3 million in revenue over the last 12 months. The Épalinges, Switzerland-based company plans to list on the NYSE under the symbol ADCT. Morgan Stanley, BofA Merrill Lynch and Cowen are the joint bookrunners on the deal. Insiders intend to purchase up to $115 million of the IPO (57% of the deal).

Aprea Therapeutics (APRE), a Phase 3 biotech developing targeted therapies for cancer, plans to raise $75 million by offering 5.0 million shares at a price range of $14.00 to $16.00. At the midpoint of the proposed range, Aprea Therapeutics would command a market value of $325 million. Aprea Therapeutics was founded in 2002. The Boston, MA-based company plans to list on the Nasdaq under the symbol APRE. J.P. Morgan, Morgan Stanley and RBC Capital Markets are the joint bookrunners on the deal.

Frequency Therapeutics (FREQ), a Phase 2 biotech developing therapies for degenerative diseases, plans to raise $101 million by offering 6.7 million shares at a price range of $14.00 to $16.00. At the midpoint of the proposed range, Frequency Therapeutics would command a market value of $526 million. Frequency Therapeutics was founded in 2014. The Woburn, MA-based company plans to list on the Nasdaq under the symbol FREQ. J.P. Morgan, Goldman Sachs and Cowen are the joint bookrunners on the deal.

MetroCity Bankshares (MCBS), a Georgia bank focused on serving Asian-American communities in the Eastern US and Texas, plans to raise $30 million by offering 1.9 million shares at a price range of $14.50 to $16.50. At the midpoint of the proposed range, MetroCity Bankshares would command a market value of $392 million. MetroCity Bankshares, which was founded in 2006, booked $97 million in revenue over the last 12 months. The Doraville, GA-based company plans to list on the Nasdaq under the symbol MCBS. Keefe Bruyette Woods and Raymond James are the joint bookrunners on the deal. It is currently listed on the OTCQX under the symbol MCBS.

Monopar Therapeutics (MNPR), a Phase 3 biotech developing therapies for various types of cancer, plans to raise $40 million by offering 4.4 million shares at a price range of $8.00 to $10.00. At the midpoint of the proposed range, Monopar Therapeutics would command a market value of $130 million. Monopar Therapeutics was founded in 2014. The Wilmette, IL-based company plans to list on the Nasdaq under the symbol MNPR. JonesTrading, Aegis Capital Corp. and Brookline Capital Markets are the joint bookrunners on the deal.

Viela Bio (VIE), a late-stage biotech developing antibodies licensed from AstraZeneca, plans to raise $150 million by offering 7.5 million shares at a price range of $19.00 to $21.00. At the midpoint of the proposed range, Viela Bio would command a market value of $1.0 billion. Viela Bio, which was founded in 2017, booked $20 million in revenue over the last 12 months. The Gaithersburg, MD-based company plans to list on the Nasdaq under the symbol VIE. Goldman Sachs, Morgan Stanley and Cowen are the joint bookrunners on the deal. Insiders intend to purchase up to $50 million of the IPO (33% of the deal).

IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 9/26/19, the Renaissance IPO Index was up 23.9% year-to-date, while the S&P 500 had a gain of 18.8%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and VICI Properties (VICI). The Renaissance International IPO Index was up 12.2% year-to-date, while the ACWX was up 11.9%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.