After one of the busiest weeks of the year, just three deals are on the IPO calendar for the week ahead: two biotechs and a Chinese real estate platform, which plan to raise a combined $222 million. In addition, as many as three SPACs may raise up to $475 million.
Note: Updated on Monday for RAPT Therapeutics' launch.
Most October IPOs have faced pricing pressure, and growth IPOs in particular may be frightened by the prospect of being valued below expectations.
Fangdd Network Group (DUO) is attempting to raise $98 million at a fully diluted $1.2 billion market cap, with insiders buying 20% of the deal. One of China's largest online real estate platforms, Fangdd's marketplace features 131 million properties, and is used by 1.1 million registered real estate agents. The company booked $227 million in sales during the 1H19 (+55% y/y), with a 21% gross margin and a 4% operating margin.
Oyster Point Pharma (OYST) plans to raise $85 million at a fully diluted market cap of $385 million. Backed by NEA and Versant, Oyster is developing a nasal spray formulation Chantix (Pfizer's popular smoking-cessation drug) for dry eye disease.
RAPT Therapeutics (RAPT), an early-stage biotech developing therapies for cancer and inflammatory diseases, re-launched a downsized $39 million IPO on Monday. The company previously attempted an IPO in July 2019. Pricing on Wednesday, it's a fast turnaround due to the fact that insiders have indicated on $30 million of the deal.
While it is already traded, Social Capital's SPAC has completed its acquisition, and will begin trading as Virgin Galactic (SPCE) on Monday.
Three blank check companies could price in the week ahead. Osprey Technology Acquisition (SFTW.U) is the largest, raising $250 million; it is led by Edward and Jonathan Cohen, who previously took a SPAC public and acquired Falcon Minerals (FLMN; $6.34). LGL Systems Acquisition (DFNSU) is a defense-focused SPAC led by Marc Gabelli and Bob LaPenta targeting $125 million. Last, Merida Merger I (MCMJU) is the latest cannabis SPAC; led by Peter Lee and Mitchell Baruchowitz, Merida is aiming for $100 million.
| U.S. IPO Calendar | |||
|---|---|---|---|
| Issuer Business |
Deal Size Market Cap |
Price Range Shares Filed |
Top Bookrunners |
| LGL Systems Acquisition (DFNSU) Reno, NV |
$125M $156M |
$10 12,500,000 |
Jefferies |
| Blank check company led by Marc Gabelli and the co-founder of L3 Technologies targeting the defense industry. | |||
| Oyster Point Pharma (OYST) Princeton, NJ |
$85M $385M |
$16 - $18 5,000,000 |
JP Morgan Cowen |
| Phase 3 biotech developing a nasal spray formulation for dry eye disease. | |||
| Fangdd Network Group (DUO) Shenzhen, China |
$98M $1,185M |
$13 - $15 7,000,000 |
Morgan Stanley Citi |
| Chinese online real estate marketplace. | |||
| Merida Merger I (MCMJU) New York, NY |
$100M $126M |
$10 10,000,000 |
EarlyBird |
| Blank check company formed by Merida Capital Partners targeting the cannabis industry. | |||
| Osprey Technology Acq. (SFTW.U) Philadelphia, PA |
$250M $313M |
$10 25,000,000 |
Credit Suisse |
| Second blank check company led by Edward and Jonathan Cohen targeting the tech industry. | |||
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The following IPOs are expected to price this week:
Fangdd Network Group (DUO), a Chinese online real estate marketplace, plans to raise $98 million by offering 7.0 million shares at a price range of $13.00 to $15.00. At the midpoint of the proposed range, Fangdd Network would command a market value of $1.2 billion. Fangdd Network Group, which was founded in 2011, booked $404 million in sales over the last 12 months. The Shenzhen, China-based company plans to list on the Nasdaq under the symbol DUO. Morgan Stanley is the lead bookrunner on the deal. Insider Decent Capital intends to purchase up to $20 million on the IPO (20% of the deal).
Oyster Point Pharma (OYST), a Phase 3 biotech developing a nasal spray formulation for dry eye disease, plans to raise $85 million by offering 5.0 million shares at a price range of $16.00 to $18.00. At the midpoint of the proposed range, Oyster Point Pharma would command a market value of $385 million. Founded in 2015, the Princeton, NJ-based company plans to list on the Nasdaq under the symbol OYST. J.P. Morgan is the lead bookrunner on the deal.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 10/24/19, the Renaissance IPO Index was up 23.7% year-to-date, while the S&P 500 had a gain of 20.1%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and Roku (ROKU). The Renaissance International IPO Index was up 17.5% year-to-date, while the ACWX was up 14.7%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.
