Eight companies raised $2.1 billion this past week, capping off the US IPO market's largest quarter in five years. The week was split between tech and biotechs, including two in the biotech space that went public at valuations of more than $2.0 billion. Over 10 companies submitted initial filings this past, promising an active July.
This week, we also released our 2Q 2019 US Quarterly Review. 62 companies went public during the quarter and raised $25 billion, a four-year high by deal count and a five-year high by proceeds.
| 8 IPOs and 1 SPAC During the Week of June 24th, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 06/28 |
| Adaptive Biotechnologies (ADPT) | $300M | $2,696M | 25% | +102% | +142% |
| Provides genetic immunosequencing tests used to diagnose and treat diseases. | |||||
| BridgeBio Pharma (BBIO) | $349M | $2,048M | 13% | +62% | +59% |
| Late-stage biotech developing therapies for genetic diseases and cancers. | |||||
| The RealReal (REAL) | $300M | $1,819M | 11% | +45% | +45% |
| Authenticated online luxury consignment store. | |||||
| Morphic Holding (MORF) | $90M | $465M | 0% | +20% | +32% |
| Preclinical biotech developing oral integrin inhibitors for chronic diseases. | |||||
| Karuna Therapeutics (KRTX) | $89M | $396M | 0% | +25% | +25% |
| Phase 2 biotech developing therapies for schizophrenia and other CNS disorders. | |||||
| Change Healthcare (CHNG) | $557M | $4,076M | -26% | +15% | +12% |
| Provides healthcare revenue cycle management software and services. | |||||
| Churchill Capital Corp II (CCX.U) | $600M | $750M | 0% | +1% | +2% |
| Second blank check company founded by dealmaker and former Citi executive Michael Klein. | |||||
| Linx (LINX) | $308M | $1,805M | 0% | -3% | -3% |
| Brazilian provider of POS/ERP connectivity software and payment services. | |||||
| Cambium Networks (CMBM) | $70M | $311M | -14% | -19% | -20% |
| Provides wireless broadband networking products. | |||||
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KKR-backed BridgeBio (BBIO) became the year's largest biotech IPO this week, raising $349 million at a $2.0 billion market cap, and finishing the week up 57%. BridgeBio is developing a large pipeline of candidates for genetic diseases, and last year's spin-off Eidos Therapeutics (EIDX) has outperformed since its IPO. Adaptive Biotechnologies (ADPT) priced well above its original range and flew up 102% on its first day, the year's second-best pop, and closed Friday even higher with a 142% return from IPO.
Biotechs Morphic (MORF) and Karuna (KRTX) also traded up, aiming to improve drugs that have showed toxicity issues in the past. Working with immunology pioneer Timothy Springer, Morphic only has preclinical data so far, but its oral integrin candidate could eventually take share in a large market. Karuna is also targeting a large market, psychosis, and is led by an experienced management team.
The RealReal (REAL) priced up and popped 45% on Friday, continuing a streak of strong returns for fast-growing e-commerce plays (RVLV, CHWY). Led by the founder of infamous dot-com IPO Pets.com, The RealReal is a leader in the emerging online luxury resale market. However, it is currently unprofitable, spending heavily on sales and marketing, as well as authentication.
The week's largest deal, Change Healthcare (CHNG), priced well below the range to raise $557 million. Spun out of McKesson with backing from Blackstone, the large provider of healthcare billing software and services finished the week with a 12% gain.
Cambium Networks (CMBM) was the week's worst-performer, as the wireless networking products company
fell 19% on its first day. While it came public at a discount to peers, investors may have been worried about slowing growth at the end of 2018, and gross margin pressure.
Traded in Brazil, retail payment software company Linx (LINX) raised $308 million in an upsized global offering that listed it on the NYSE. It is the year's first US offering from a Brazilian company. Trading was muted, which is not surprising for a cross-listing.
Newly-formed office REIT Priam Properties (PRMI) postponed its planned $171 million IPO. Radio giant iHeartMedia (IHRT) withdrew its S-1, instead planning to complete a direct listing in July.
| 12 Filings During the Week of June 24th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| China Yunhong Holdings (ZGYHU) | $50M | SPAC | Maxim |
| Blank check company targeting consumer or lifestyle assets in Asia. | |||
| Livongo (LVGO) | $100M | Health Care | Morgan Stanley |
| Provides a unified healthcare platform for chronic illness management. | |||
| ProSight (PROS) | $100M | Financials | Goldman |
| Specialty P&C insurer that operates seven segments of coverage. | |||
| Health Catalyst (HCAT) | $200M | Technology | Goldman |
| Provides a data analytics platform and services to healthcare organizations. | |||
| Sunnova (NOVA) | $100M | Utilities | BofA ML |
| Provides residential solar energy systems and services. | |||
| WiMi Hologram (WIMI) | $50M | Technology | Benchmark |
| Chinese provider of holographic augmented reality ad services and software. | |||
| Castle Biosciences (CSTL) | $58M | Health Care | Leerink |
| Sells genetic tests used to diagnose skin cancers. | |||
| Orisun Acquisition (ORSNU) | $40M | SPAC | Chardan |
| Blank check company led by an experienced Chinese investor targeting a high-tech business in the US. | |||
| The OLB Group (OLB) | $15M | Technology | ThinkEquity |
| Merchant acquirer with a suite of payment services. | |||
| Flowr (FLWR) | $94M | Consumer Discretionary | Barclays |
| Canadian medical and recreational cannabis producer. | |||
| Afya (AFYA) | $100M | Consumer Discretionary | Morgan Stanley |
| Brazilian for-profit medical and healthcare education group. | |||
| AssetMark Financial (AMK) | $100M | Financials | JP Morgan |
| Provides a wealth management platform for independent financial advisers. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 6/27/19, the Renaissance IPO Index was up 35.6% year-to-date, while the S&P 500 had a gain of 17.9%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Elanco (ELAN) and VICI Properties (VICI). The Renaissance International IPO Index was up 13.3% year-to-date, while the ACWX was up 13.6%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include SoftBank and Xiaomi.
This past week, Renaissance Capital announced in a press release that options contracts are now available on the IPO ETF.
