Ten IPOs are on the IPO calendar to raise $1.4 billion, led by an $800 million offering of natural gas pipelines. The MLP is joined by a government-focused REIT as the two dividend-producing IPOs seek to price late in the week. The remaining eight IPOs are in the health care sector and include four biotechs, one medical device company and three in the diagnostics space. Last week saw a hot gene therapy biotech (ONCE) gain over 100% while other health care IPOs had average returns.
Gas pipeline MLP and office REIT could raise $1 billion
Columbia Pipeline Partners LP (CPPL) is set to raise $800 million at a market value of $1.9 billion. A spinoff of Nisource, the MLP owns a 15% interest in 15,000 miles of interstate pipelines and one of the largest natural gas storage systems in the US. It targets an initial annual yield of 3.4% at the midpoint. A number of recent midstream MLP IPOs in the Utica and Marcellus shales (RMP, AM, CNNX) trade below the offer price, but Columbia's transportation and storage assets could draw more comparisons to Dominion Midstream (DM; +66%) than gas gathering pipeline MLPs.
Easterly Government Properties (DEA) leases office space to government agencies, including the DEA, FBI and IRS. It owns 29 properties across several states (primarily CA, TX, VA) and targets an initial yield of 5.5%. On Friday, Texas-based electric infrastructure REIT InfraREIT (HIFR) traded up 16% on Friday after it priced above the range.
Osteoarthritis pain, pet pain and PET scans
Carbylan Therapeutics (CBYL) is developing an injectable combination therapy for osteoarthritis pain that it believes is more effective than Genzyme's market-leading treatment. Close peer and 2014 IPO Flexion Therapeutics (FLXN) is up over 50% from the offer price, but Carbylan will face intense competition and likely need additional capital. Nexvet (NVET) has developed a platform for developing pet therapies based on blockbuster biologics approved for use in humans. Its most advanced drug candidate for osteoarthritis pain in dogs is undergoing a pivotal trial with data expected later this year. Advanced Accelerator Applications (AAAP) markets diagnostics imaging products used in PET scans and booked $74 million in sales in the trailing twelve months. However, the company also has several nuclear medicine drug candidates under development, including an orphan-designated treatment for midgut neuroendocrine tumors in a Phase 3 trials.
Two eye-focused biotech IPOs
Inotek Pharmaceuticals (ITEK) is in a Phase 2 trial for an eye drop therapy aimed at treating glaucoma, and expects to complete Phase 3 trials by early 2017. The company believes that its combination therapy with market-leading drug latanoprost is more effective than latanoprost alone. Close peers and recent IPOs Aerie Pharmaceuticals (AERI; +180%) and Ocular Therapeutix (OCUL; +135%) have outperformed. Microcap biotech EyeGate Pharmaceuticals (EYEG) originally planned to price its $10 million IPO late last year, postponed and returned to the calendar last week, and pushed back the offering to this week.
Drug reaction tests, insulin pumps and coronary catheters
AltheaDx (IDGX) began selling its gene-based tests in October 2013 for predicting adverse drug reactions, and booked $17 million in sales in the last twelve months. Its target market remains largely unproven, but the wide market opportunity, fast growth (220% in the 9mo14) and improving margins could fuel some interest. Asante Solutions (PUMP) hopes to expand the $1.4 billion market for insulin pumps with its system. The company faces considerable hurdles as it attempts to take market share from established competitors and achieve a positive gross margin, though its easy-to-use pre-filled cartridges could convince hesitant diabetics to make the switch to its pump system. Infraredx (REDX), which sells optical catheter systems for coronary artery disease, had planned to price its $56 million IPO last Thursday, but pushed the offering to this week. Last week's coronary catheter maker, Avinger (AVGR), priced at the midpoint and traded up 4%.
Barington/Hilco Acquisition (BHACU), a blank check company formed to acquire a US consumer business, plans to raise $10 million.
| Renaissance Capital's IPO Calendar - Week of February 2, 2015 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Top 2 bookrunners |
| Columbia Pipeline Partners LP Houston, TX |
CPPL NYSE |
$800 | $19 - $21 40,000,000 |
Barclays Citi |
| NiSource MLP with gas pipelines and storage systems in the Utica and Marcellus shales. | ||||
| Easterly Government Properties Washington, DC |
DEA NYSE |
$180 | $14 - $16 12,000,000 |
Citi Raymond James |
| Newly formed REIT focused on office properties leased to US government agencies. | ||||
| Carbylan Therapeutics Palo Alto, CA |
CBYL NASDAQ |
$75 | $12 - $14 5,800,000 |
Leerink Partners |
| Developing a novel, injectable treatment for osteoarthritis pain in the knee | ||||
| Advanced Accelerator Applications Saint Genis Pouilly, France |
AAAP NASDAQ |
$75 | $13 - $15 5,358,000 |
Citi Jefferies |
| Sells PET scan imaging tracers and is developing a treatment for rare tumors. | ||||
| Inotek Pharmaceuticals Lexington, MA |
ITEK NASDAQ |
$65 | $13 - $15 4,643,000 |
Cowen & Company Piper Jaffray |
| Biotech developing a small molecule eye drop therapy to treat glaucoma. | ||||
| AltheaDx San Diego, CA |
IDGX NASDAQ |
$60 | $12 - $14 4,615,000 |
Citi Jefferies |
| Offers personalized genetic diagnostic tests to predict adverse drug reactions. | ||||
| Nexvet Biopharma Dublin, Ireland |
NVET NASDAQ |
$58 | $13 - $16 4,000,000 |
BofA Merrill Lynch Cowen & Company |
| Developing biologics for the treatment of pain and inflammation in cats and dogs. | ||||
| Infraredx Burlington, MA |
REDX NASDAQ |
$56 | $13 - $15 4,000,000 |
RBC Capital Markets Canaccord Genuity |
| Markets a FDA-cleared optical catheter that identifies lipid core coronary plaques. | ||||
| Asante Solutions Sunnyvale, CA |
PUMP NASDAQ |
$49 | $13 - $15 3,500,000 |
Leerink Partners Cowen & Company |
| Markets a recently-approved insulin pump system with pre-filled cartridges. | ||||
| EyeGate Pharmaceuticals Waltham, MA |
EYEG NASDAQ |
$10 | $6 - $8 1,428,572 |
Aegis Capital Chardan Capital Markets |
| Late-stage biotech developing a treatment for eye inflammation. | ||||
Renaissance Capital issued institutional Pre-IPO Research on these IPOs prior to pricing.
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IPO Pipeline update
Small biotech Summit Corp. (SMMT) was the only initial filer last week - the second week in a row with just one IPO added to the pipeline. Deals continued to join the calendar, including healthcare analytics company Inovalon Holdings (INOV), which is set to raise $500 million at a diluted market cap of $3.4 billion during the week of February 9. Another dividend IPO, Sol-Wind Renewable Power LP (SLWD), also set terms to price next week.
IPO Index hit by Alibaba
The Renaissance US IPO Index, a market cap weighted basket of newly public companies designed to represent the US IPO market, gained 7.7% in 2014 but fell 4.2% last week due to Alibaba's dip. Renaissance Capital's IPO ETF tracks the index, and its top holdings include Zoetis (ZTS), Alibaba (BABA), Twitter (TWTR), Ally Financial (ALLY) and Hilton (HLT).
