November has kicked off with seven new additions to the IPO calendar, including four health care deals, two financial firms and one software provider. The next seven days should see even more companies launch roadshows in order to begin trading before Thanksgiving.
The calendar filled up as both the S&P 500 and the Nasdaq Composite have fully recovered from August's sell-off, with both indices up over 8% in the past 30 days. Meanwhile, the VIX volatility index has continued its descent, closing below 20 each day for the past month. Thirty companies submitted initial filings during October, providing a large active backlog for more 4Q IPOs.
However, several signs point to a still-precarious IPO market. The 20 IPOs that began trading in October average a return of 7.5% - far better than the year-to-date average loss of 2%, but not enough to get most investors excited. October's three largest deals, First Data (FDC; +0.9%), Ferrari (RACE; +0.7%) and Pure Storage (PSTG; +2.6%), have largely disappointed. Issuers may not be excited about the valuations they are receiving, either: 17 of the past 20 IPOs came public below the original range. Multi-billion offerings from Digicel (DCEL) and Albertsons (ABS) were postponed due to insufficient demand at the proposed price, and other LBOs appear to be delaying.
New launches for the week of November 9
Five IPOs are now set to price on Tuesday, November 10, including four biotechs. The largest, Australia-based Mesoblast (MESO), filed and set terms to list its shares in the US; the late stage biotech is developing regenerative therapies based on adult stem cells. After postponing an IPO in February, Advanced Accelerator Applications (AAAP) has come back with a higher valuation and new results on its lead candidate. Voyager Therapeutics (VYGR), which set terms on Friday, is a well-funded biotech ($169mm in pre-IPO cash) backed by Third Rock and partnered with Sanofi developing gene therapies for Parkinson's disease. WAVE Life Sciences (WVE) is a preclinical RNA biotech backed by RA Capital. Also on Tuesday, Midwestern commercial bank Equity Bancshares (EQBK) is set to raise $41 million at a market cap of $183 million.
On Thursday, November 11, mortgage company loanDepot (LDI) is set to raise $510 million - more capital than the week's other six IPOs combined. Learning management company Instructure (INST) is scheduled to be the first software provider to go public in the US since July's Rapid7 (RPD; +36%).
| Mid-week round-up: 7 IPOs have set terms so far this week | |||||
| Issuer Business |
Symbol Exchange |
Deal Size($m) |
Price Range Shares Filed |
Pricing Date |
Top 2 Bookrunners |
| loanDepot Foothill Ranch, CA |
LDI NYSE |
$510 |
$16-18 30,000,000 |
Thu 11/12 |
Morgan Stanley Goldman Sachs |
| Nonbank consumer lender focused on originating and selling home loans. |
|||||
| Instructure Salt Lake City, UT |
INST NYSE |
$75 | $16-18 4,400,000 |
Thu 11/12 |
Morgan Stanley Goldman Sachs |
| Operates an online learning management system. |
|||||
| Mesoblast Australia |
MESO Nasdaq |
$69 | $12.10 5,742,510 |
Tue 11/10 |
JP Morgan Credit Suisse |
| Developing regenerative medicine based on adult stem cells. |
|||||
| Advanced Accelerator France |
AAAP Nasdaq |
$75 | $15-17 4,688,000 |
Tue 11/10 |
Citi Jefferies |
| Developing gene therapies for rare retinal diseases. | |||||
| WAVE Life Sciences Allen, TX |
WVE Nasdaq |
$80 | $15-17 5,000,000 |
Tue 11/10 |
Jefferies Leerink Partners |
| Preclinical biotech developing optimized RNA therapies for rare diseases. |
|||||
| Equity Bancshares Wichita, KS |
EQBK Nasdaq |
$41 | $22-24 1,790,000 |
Tue 11/10 |
KBW Stephens |
| Commercial bank with $1.4 billion in assets and 25 locations in KS and MO. |
|||||
| Axsome Therapeutics New York, NY |
AXSM Nasdaq |
$51 | $11-13 4,250,000 |
Tue 11/10 |
Ladenburg Cantor |
| Developing an oral formulation of an existing therapy for pain and osteoarthritis. |
|||||
| IPO ETF manager Renaissance Capital (NYSE: IPO, NYSE: IPOS) | |||||
Others in the pipeline could go soon
More health care, financial and technology IPOs could be on the way. Payment services provider Square (SQ) disclosed its 3Q15 financials last week, and is eligible to launch Wednesday morning. Online dating company Match Group (MTCH) and email security provider Mimecast (MIME), could set terms on Friday, along with a number of larger or revenue-generating health care IPOs, including Ellipse Technologies (MGEC), BeiGene (BGNE), Hutchison China MediTech (HCM) and Basilea Pharmaceuticals (BSLN). While the LBOs on file have delayed going public, Univision (UVN) and McGraw-Hill Education (MHED) both updated filings on Monday.
