Up to six companies could price their IPOs this week. All are either LPs or health care companies (including three biotechs).
Two LPs on deck, one offering power-generating wood pellets
Enviva Partners LP (EVA) is backed by Riverstone/Carlyle and is the world’s largest manufacturer of wood pellets, which are a cleaner burning alternative to coal for utilities. The company operates five plants, which account for 15% of global capacity, in the southeastern US and ships its wood pellets to three utilities in the UK and Belgium. Black Stone Minterals LP (BSM) holds oil and natural gas interests mostly in the Louisiana-Mississippi Salt Basins. Revenue grew 18% to $548 million in 2014.
Blueprint draws up a new kinase-focused cancer treatment
Blueprint Medicines (BPMC) was founded by the scientists behind Gleevec ($4.7 billion in 2013 sales) and has a group of kinase inhibitors in preclinical development. Its two lead drugs, which will enter clinical trials in mid-2015, produced full tumor regression in mice over 15 to 30 days. Third Rock, Fidelity, and other investors have contributed $140 million, and Alexion signed a collaboration agreement ($15 million upfront and $250+ million of milestone payments) in March 2015 to develop a treatment for a rare genetic disease.
A safer treatment for migraines
CoLucid Pharmaceuticals (CLCD) is developing a treatment for acute migraines that it licensed from Eli Lilly. In Phase 2 trials, the drug appeared as effective as and safer than triptans, the standard of care. Phase 3 trials are set to begin in mid-2015.
Two other health care companies look to raise $20 million or less each
OpGen (OPGN) is in the early stages of commercializing DNA test products that help to combat antibiotic resistance. Its Acuitas MDRO test can identify antibiotic-resistant bacteria in 24 hours and is being used at eight hospitals and long-term care facilities. The company, which is low on cash and lost its CFO in March, has seen limited sales ($4.1 million in 2014), but hopes the IPO will allow it to expand its sales force. On Friday, it cut its offering size by more than half from $34 million (3.8 million shares at $8-$10) to $15 million (2.5 million share plus warrant units at $5.50-$6.50).
Viking Therapeutics' (VKTX) second run at an IPO was pushed back to this week. Since its first attempt to go public in September, the Ligand Pharmaceuticals-backed biotech has slashed its proposed market cap by 60% and changed its lead candidate from a diabetes drug (still in development) to a treatment for cancer cachexia, which is set to begin Phase 2 trials later this year.
| Renaissance Capital's IPO Calendar - Week of 4/27/2015 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Top 2 Bookrunners |
| Black Stone Minerals LP Houston, TX |
BSM NYSE |
$450 | $19 - $21 22,500,000 |
Barclays BofA Merrill Lynch |
| MLP with royalty and working interests in oil and gas production assets across the US. |
||||
| Enviva Partners LP Bethesda, MD |
EVA NYSE |
$200 | $19 - $21 10,000,000 |
Barclays Goldman Sachs |
| Riverstone/Carlyle-backed supplier of utility-grade wood pellets. |
||||
| Blueprint Medicines Cambridge, MA |
BPMC NASDAQ |
$115 | $15 - $17 7,187,500 |
Goldman Sachs Cowen & Company |
| Preclinical biotech developing kinase inhibitors for cancer and genetic diseases. |
||||
| CoLucid Pharmaceuticals Burlington, MA |
CLCD NASDAQ |
$75 | $13 - $15 5,360,000 |
Piper Jaffray Stifel |
| Late-stage biotech developing therapies for acute migraines. |
||||
| Viking Therapeutics San Diego, CA |
VKTX NASDAQ |
$20 | $7 - $9 2,500,000 |
Laidlaw & Company (UK) |
| Developing a drugs for cancer cachexia and diabetes. |
||||
| OpGen Gaithersburg, MD |
OPGN NASDAQ |
$15 | $5.50 - $6.50 2,500,000 |
Maxim Group LLC |
| Provides genetic tests that identify multi-drug resistant bacterial infections. |
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IPO pipeline update
Three companies submitted initial filings last week. Brazilian steakhouse chain Fogo de Chao (FOGO), which has 26 locations in the US and 9 in Brazil and was acquired by Thomas H. Lee Partners for $400 million in 2012, filed for a $75 million deal. Motor fuel distributor GPM Petroleum LP (GPMP) and Utah commercial bank People’s Utah Bancorp (PUB) also joined the pipeline.
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 10% year-to-date, compared to 3% for the S&P 500. This suggests that 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), Alibaba (BABA), Hilton (HLT), Voya Financial (VOYA) and Ally Financial (ALLY). To find out if this is the best ETF for you, visit our IPO investing page.
