In the second week after the SEC opened we saw a number of launches and two billion-dollar biotechs, Alector (ALEC) and Gossamer Bio (GOSS), price their IPOs. Another biotech, Harpoon Therapeutics (HARP), along with three SPACs, also priced their IPOS.
Alector, a Phase 1 biotech developing therapies for neurodegeneration, raised $176 million in its IPO on Wednesday, commanding a fully diluted market value of $1.4 billion, but ended its first day of trading down 5% and ended the week down 14%. Alector's poor performance rivaled that of another billion dollar biotech, Moderna (MRNA), which IPO'd in late 2018 with a fully diluted market value of $8.1 billion, and ended its first day down 19%.
Harpoon Therapeutics, a Phase 1 biotech developing T cell immunotherapies for various cancers, raised $76 million in its IPO on Thursday. It also broke issue on its first day of trading, ending the day down 3.6%.
Gossamer Bio, which is developing in-licensed imunotherapies for asthma and other indications, took a different path than its billion dollar biotech peers, ending its first trading day up 12.1%, after raising $276 million at a market value of $1.1 billion in an upsized IPO on Thursday.
Also notable this week, workplace messaging platform Slack said that it plans to go public, but does not plan to do a traditional IPO, instead opting to go public via a direct listing. Spotify (SPOT), the worlds largest music streaming subscription service, did a direct listing on the NYSE at a price of $132 in early 2018 and traded up 12.9% on its first day. It will be interesting to see if other big names also decide to take this route in the future.
| 6 IPOs During the Week of February 4th, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 02/08 |
| Gossamer Bio (GOSS) | $276M | $1,056M | 0% | +12% | +12% |
| Developing in-licensed immunotherapies for asthma and other indications. | |||||
| Wealthbridge Acquisition (HHHHU) | $50M | $65M | 0% | +0% | +0% |
| Blank check company targeting the air transportation industry in China. | |||||
| Monocle Acquisition (MNCLU) | $150M | $194M | 0% | +0% | +0% |
| Blank check company formed to acquire an aerospace & defense or industrial business. | |||||
| RMG Acquisition (RMG.U) | $200M | $250M | 0% | +0% | +0% |
| Blank check company formed to acquire a materials or energy services business. | |||||
| Harpoon Therapeutics (HARP) | $76M | $377M | 0% | -4% | -4% |
| Phase 1 biotech developing T cell immunotherapies for various cancers. | |||||
| Alector (ALEC) | $176M | $1,391M | 0% | -5% | -14% |
| Phase 1 biotech developing therapies for neurodegeneration. | |||||
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| 4 Filings During the Week of February 4th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Avantor (VNOR.RC) | $1,500M | Materials | Goldman |
| LBO'd provider of laboratory supplies and services. | |||
| ShockWave Medical (SWAV) | $70M | Health Care | Morgan Stanley |
| Sells medical systems used in treating cardiovascular disease. | |||
| American Resources (AREC) | $9M | Energy | Maxim |
| Kentucky-based producer of metallurgical coal. | |||
| Tortoise Acquisition (SHLL.U) | $225M | SPAC | Barclays |
| Blank check company targeting the energy industry. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 2/7/19, the Renaissance IPO Index was up 19.3% year-to-date, while the S&P 500 had a gain of 8.1%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include VICI Properties (VICI) and Spotify (SPOT). The Renaissance International IPO Index was up 4.2% year-to-date, while the ACWX was up 7.0%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include SoftBank and China Tower.
