Three biotechs, two Chinese issuers, and one SPAC went public this past week, led by preclinical oncology biotech Nkarta (NKTX), which popped 166% in the best first-day return for a $10+ million IPO since 2015.
Some major news hit the IPO pipeline this week. Long-awaited IPO candidate Postmates chose to be acquired by Uber, secretive data unicorn Palantir announced a confidential filing, and two companies publicly filed for estimated billion-dollar IPOs, mortgage lender Rocket Companies (RKT) and cloud hosting company Rackspace (RXT).
Nkarta (NKTX) upsized its offering and priced above the range to raise $252 million at a $584 million market cap. Backed by lead investor RA Capital, the company is developing off-the-shelf cancer therapies based on natural killer cells, a promising therapeutic area and a hot space for investors. It plans to initiate a Phase 1 trial for its lead candidate in the 4Q20 and generate new INDs every 9 to 12 months.
Oncology biotech Poseida Therapeutics (PSTX) priced an upsized IPO at the high end to raise $224 million at a $1 billion market cap, before falling 4% on its debut. Poseida previously withdrew an IPO in 2019 in favor of a private funding round led by Novartis. Its lead candidate, an autologous CAR T therapy, is beginning a potentially registrational Phase 2 trial for relapsed and refractory multiple myeloma, though the FDA may require a Phase 3 trial due to concern over CAR T trial deaths.
French biotech Inventiva (IVA) priced its US IPO at the midpoint to raise $108 million at a $559 million market cap. Currently listed on the Euronext Paris (IVA), Inventiva is developing therapies for NASH and other diseases. The company recently reported positive topline results from a Phase 2b trial for its lead candidate and expects to commence end of Phase 2b meetings in the 4Q20. Inventiva finished down 7%.
BlueCity Holdings (BLCT) raised $85 million at a $614 million market cap. Fast-growing with improving margins, BlueCity is home to Blued, China’s largest gay dating app. Blued had 6 million MAUs in the 1Q20 (+20% y/y). While membership is growing fast and in the early stages of monetization, censorship of LGBTQ content in China poses a risk. BlueCity finished the week up 53%.
Quhuo (QH) upsized its deal to raise $33 million at a $456 million market cap. Quhuo is China’s largest third party gig worker platform, with 41,000 average monthly active workers, and its clients include large enterprises Meituan and KFC. Quhuo finished up 28%.
The SPAC market is still red-hot. The first-ever warrantless SPAC, Therapeutics Acquisition (TXAC) upsized its offering to raise $118 million. Formed and led by RA Capital executives, the company plans to target the biotech industry. Therapeutics Acquisition gained 20% on its first day, the best-ever pop for a SPAC, and finished the week up 58%.
| 6 IPOs During the Week of July 6th, 2020 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 07/10 |
| Nkarta (NKTX) | $252M | $584M | 20% | +166% | +166% |
| Preclinical developer of off-the-shelf cancer therapies based on natural killer cells. | |||||
| Therapeutics Acquisition (TXAC) | $118M | $147M | 0% | +20% | +58% |
| Blank check company formed by RA Capital targeting the biotech industry. | |||||
| BlueCity Holdings (BLCT) | $85M | $614M | 0% | +46% | +53% |
| Leading online LGBTQ community and dating platform in China. | |||||
| Quhuo (QH) | $33M | $456M | 0% | +28% | +28% |
| Provides workforce operations solutions for consumer service platforms in China. | |||||
| Poseida Therapeutics (PSTX) | $224M | $1,016M | 7% | -4% | -4% |
| Phase 2 biotech developing CAR T cell therapies for multiple myeloma. | |||||
| Inventiva (IVA) | $108M | $559M | 5% | -7% | -7% |
| Phase 2 French biotech developing therapies for NASH and other diseases. | |||||
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Ten IPOs and three SPACs submitted initial filings this past week. Leading mortgage lender Rocket Companies (RKT), which operates under the Rocket and Quicken brands, filed for an estimated $3 billion IPO. Cloud hosting services provider Rackspace Technology (RXT) filed for an estimated $1 billion IPO. Chinese electric vehicle manufacturer Li Auto (LI), customer support services provider IBEX (IBEX), health center chain Oak Street Health (OSH), viral disease biotech AlloVir (ALVR), Brazilian digital education spin-off Vasta Platform (VEDU.RC), and Vital Farms (VITL), the largest US producer of pasture-raised eggs, all filed to raise $100 million. Foreign issuers Baosheng Media Group Holdings (BMGH.RC) and Vision Marine Technologies (VMAR) filed to raise $28 million and $18 million, respectively.
Tech SPAC ACE Convergence Acquisition (ACEV.U) filed to raise $200 million, industrial technology SPAC NewHold Investment (NHICU) filed to raise $150 million, and entertainment SPAC Vistas Media Acquisition (VMACU) filed to raise $100 million.
| 13 Filings During the Week of July 6th, 2020 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Baosheng Media Group (BMGH.RC) | $28M | Technology | Univest Securities |
| Provides online marketing services for advertisers and media companies in China. | |||
| IBEX (IBEX) | $100M | Industrials | Citi |
| Provides outsourced customer support and marketing services. | |||
| Li Auto (LI) | $100M | Consumer Discretionary | Goldman |
| Manufactures smart electric SUVs in China. | |||
| NewHold Investment (NHICU) | $150M | SPAC | Stifel |
| Blank check company formed by NewHold Enterprises targeting an industrial technology business. | |||
| Oak Street Health (OSH) | $100M | Health Care | JP Morgan |
| Operates health centers that provide primary care for Medicare patients in the Midwest. | |||
| Rackspace (RXT) | $1,000M | Technology | Goldman |
| Leading cloud hosting services provider. | |||
| Vistas Media Acquisition (VMACU) | $100M | SPAC | I-Bankers |
| Blank check company targeting the media and entertainment industry. | |||
| Vision Marine (VMAR) | $18M | Industrials | ThinkEquity |
| Canadian manufacturer of electric powerboats and outboard powertrain systems. | |||
| Vital Farms (VITL) | $100M | Consumer Staples | Goldman |
| Largest US producer of pasture-raised eggs and butter. | |||
| Rocket Companies (RKT) | $3,000M | Financials | Goldman |
| Leading mortgage lender operating under the Rocket and Quicken brands. | |||
| ACE Convergence Acq. (ACEV.U) | $200M | SPAC | Cantor Fitz. |
| Blank check company formed by ACE Equity Partners and industry veterans targeting a tech business. | |||
| AlloVir (ALVR) | $100M | Health Care | Morgan Stanley |
| Phase 2 biotech developing allogeneic T cell therapies for viral diseases. | |||
| Vasta Platform (VEDU.RC) | $100M | Consumer Discretionary | Goldman |
| Brazilian provider of K-12 school curriculum solutions being spun out of Cogna. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 7/9/20, the Renaissance IPO Index was up 43.8% year-to-date, while the S&P 500 was down 2.4%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Zoom Video (ZM) and Uber (UBER). The Renaissance International IPO Index was up 27.4% year-to-date, while the ACWX was down 8.0%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Xiaomi and Meituan-Dianping.
