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The IPO market’s slowest spring since the financial crisis

April 30, 2020

The 2020 IPO market saw its slowest March and April in over a decade, as volatility essentially shut the IPO window. Just seven IPOs priced during the past two months, a 70% decline from the 15-year average of 23 IPOs.

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Four companies priced IPOs in April, all biotechs, raising about $450 million combined. The three that traded at month-end averaged an 82% return, benefiting from a pandemic-driven focus on healthcare stocks. Several are developing innovative therapies, and multi-year drug trials are relatively unaffected by the crisis. Each of the deals likely had significant insider support, and priced within one week of setting terms.

4 IPOs During the Month of April, 2020
Issuer Deal
Market Cap
at IPO
IPO Price Offer Date Return
at 04/30
Lyra Therapeutics (LYRA) $56M $206M $16.00 4/30 --
ORIC Pharmaceuticals (ORIC) $120M $493M $16.00 4/23 +65%
Keros Therapeutics (KROS) $96M $325M $16.00 4/07 +85%
Zentalis Pharmaceuticals (ZNTL) $165M $642M $18.00 4/02 +95%

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Signs point to a modest pickup in activity during May. The Renaissance IPO Index has soared more than 40% from its March low. The VIX volatility index has declined to the low 30’s. Follow-on offerings have ramped up.

We expect a steady stream of biotechs and SPACs to continue going public in May, and increased filing activity indicates other “pandemic-proof” companies are moving forward as well. Gambling software provider GAN Limited (GAN) is scheduled to raise $30 million next week. “Pandemic-proof” companies including grocery giant Albertsons (ACI), Chinese cloud services provider Kingsoft Cloud (KC), and Bitcoin mining play Ebang International (EBON) are on file for potential May IPOs. Others have submitted confidential filings, including cloud infrastructure provider Rackspace (RAX.RC), food delivery app DoorDash (DDSH.RC), and workflow management software Asana (SANA.RC).