Three IPOs are expected to price this week - a pump, a pump replacement and a regional bank - though the combined proceeds will still fall short of last week's single IPO.
Get pumped for medical pumps
SteadyMed (STDY) is developing a new way of delivering medication for pulmonary arterial hypertension (PAH), a rare but life-threatening disease. The pre-revenue company claims its "PatchPump" therapy is less painful and easier to use than the market-leading treatment sold by United Therapeutics (NASDAQ: UTHR). SteadyMed no doubt hopes to have a different reception than the last IPO to develop a drug/device for PAH, Bellerophon Therapeutics (BLPH; -19%), which priced below its range and had the worst first-day performance for a biotech in over 10 years.
Backed by Welsh, Carson, Anderson & Stowe, Kaiser Permanente and Advanced Technology Ventures, Valeritas (VLRX) is developing a basal-bolus insulin device for Type 2 diabetes. The last insulin pump IPO, Asante Solutions (PUMP), was postponed in February and close peer Tandem Diabetes Care (TNDM) now trades below its offer price. However, Valeritas doubled sales to $13 million in 2014 and booked a positive gross margin in the fourth quarter.
Birmingham bank
National Commerce (NCOM) could be the year's third regional bank IPO after County Bancorp (ICBK; +25%) and Avenue Financial (AVNU; +14%). The Alabama bank's executive team previously pulled off a similar strategy at Alabama National BanCorporation, which they grew from $0.8 billion in assets in 1995 to $8.0 billion in 2007, before selling it to RBC for $1.6 billion. IPO investors are betting that management can continue to improve this troubled bank's operating metrics (ROE, ROA, efficiency ratio), which are currently behind peers.
| Renaissance Capital's IPO Calendar - Week of 3/16/2015 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Bookrunners |
| Valeritas Bridgewater, NJ |
VLRX NASDAQ |
$75 | $14.00 - $16.00 5,000,000 |
Piper Jaffray Leerink Partners |
| Markets a disposable device that delivers basal-bolus insulin therapy for Type 2 diabetes. | ||||
| SteadyMed San Ramon, CA |
STDY NASDAQ |
$55 | $12.00 - $14.00 4,250,000 |
Wells Fargo Securities RBC Capital Markets |
| Developing a proprietary pump system for the treatment of PAH and pain. | ||||
| National Commerce Birmingham, AL |
NCOM NASDAQ |
$31 | $18.50 - $20.50 1,600,000 |
Keefe Bruyette Woods |
| Commercial bank with 15 offices in Alabama and Florida and $1.1 billion in assets. | ||||
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IPO pipeline update: filings pick up, led by health care
Several more IPOs joined the calendar last week, primarily small medical device companies and biotechs. The largest to set terms was SolarEdge Technologies (SEDG); the solar panel optimization company is planning its $119 million IPO for next week.
Five companies submitted initial filings last week, including four in the health care sector, most notably Blackstone's generic drug maker Par Pharmaceuticals (PRX). Immuno-oncology has been a hot space in the IPO market, and Aduro Biotech (ADRO) boasts positive Phase 2a trials and $1.2 billion in potential milestone payments from Johnson & Johnson. Party City (PRTY) also updated financial results for 2014, indicating it could soon launch its $500 million IPO.
IPO market snapshot
The Renaissance IPO Index, a market cap weighted basket of newly public companies that is designed to represent the US IPO market, has traded up 5% year-to-date, compared with 0% for the S&P 500. The IPO market remains open to new issuance. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Twitter (TWTR), Zoetis (ZTS), Alibaba (BABA), Hilton (HLT) and Ally Financial (ALLY). To find more about purchasing shares of the ETF from your broker, visit our IPO investing page.
