US IPO Week Ahead: AZEK and Vroom take the lead in another 8 IPO week

Updated Monday, 6/8.

Following the busiest week yet for the 2020 IPO market, another eight IPOs and one SPAC plan to raise $2 billion in the week ahead, led by building products maker AZEK (AZEK) online auto marketplace Vroom (VRM).

In the largest deal of the week, AZEK (AZEK) plans to raise $625 million at a $2.8 billion market  cap. Manufactures composite products for residential and commercial construction in the US, Canada, and Latin America. Top peer Trex (NYSE: TREX) has rebounded strongly since the pandemic sank the stock market, up 98% from its March low and up 39% for the year-to-date period.

After increasing its range on Friday, Vroom (VRM) plans to raise $356 million at a $2.3 billion market cap. With $1.3 billion in annual sales, the fast-growing but unprofitable company has gained traction in the used car space, getting more than 947,000 average monthly visitors in the 1Q20 (+130% y/y). While Vroom has had to slash prices in the second quarter, its IPO comes as consumers increasingly look online to buy used cars. Close competitor and 2017 IPO Carvana is up roughly 12% year-to-date, rallying 270% from its March low.

Vaccine biotech Vaxcyte (PCVX) plans to raise $210 million at a $763 million market cap. Its lead candidate, VAX-24, is a 24-valent investigational pneumococcal conjugate vaccine designed to provide broad-spectrum coverage of Merck's Pneumovax 23 with an immunogenicity profile comparable to Pfizer's Prevnar 13. The company expects to advance VAX-24 into clinical trials in the 2H 2021.

Chinese cancer test provider Burning Rock Biotech (BNR) plans to raise $196 million at a $1.5 billion market cap. The company currently offers 13 next-generation sequencing-based cancer therapy selection tests for a broad range of cancer types, and it has collaborations with pharmaceuticals including AstraZeneca, Bayer, Johnson & Johnson, Sino Biopharm, CStone, and BeiGene.

Muscle disorder biotech Avidity Biosciences (RNA) plans to raise $150 million at a $500 million market cap. The company's lead candidate AOC 1001 is designed to treat rare monogenic muscle disease myotonic dystrophy type 1. It expects to submit an IND application in 2021 and plans to initiate a Phase 1/2 clinical trial by the end of the same year.

Rare disease biotech Generation Bio (GBIO) plans to raise $126 million at a $764 million market cap. The company's pipeline includes eight programs for rare and prevalent diseases of the liver and retina. Its most advanced liver disease programs are in the preclinical stage of development and being assessed in IND-enabling studies. Its most advanced retina disease programs are in the lead optimization stage and are being assessed in animal models.

Chinese mobile data marketplace uCloudlink (UCL) plans to raise $50 million at a $581 million market cap. The company’s platforms allow users to access mobile data traffic shared by multiple network operators (MNOs). uCloudlink grew 36% in the 1Q20 with positive net income, but its gross margin declined 14 points to 35%.

Oncology biotech Lantern Pharma (LTRN) plans to raise $25 million at a $108 million market cap as it repurposes old therapies. Its in-licensed lead candidate previously failed five Phase 3 trials for non-small cell lung cancer (NSCLC) and breast cancer, and Lantern is focusing on an NSCLC subgroup it believes is promising.

SPAC Hudson Executive Investment (HECCU) plans to raise $300 million. Formed by hedge fund Hudson Executive Capital, the company intends to leverage its management team's experience and target a financial technology or healthcare business.

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A number of health care deals can launch in the week ahead, including pharmaceutical royalty acquirer Royalty Pharma (RPHA.RC), which is on file for an estimated $2 billion IPO. We’re still waiting on grocer Albertsons (ACI) to launch.

Street research is expected for and lock-up periods will be expiring for six companies. For access to Street research and lock-up period information, sign up for a free trial of IPO Pro.

IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 6/4/20, the Renaissance IPO Index was up 22.0% year-to-date, while the S&P 500 was down 3.7%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (UBER) and DocuSign (DOCU). The Renaissance International IPO Index was up 15.2% year-to-date, while the ACWX was down 10.2%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and Adyen.