One biotech and three SPACs went public this past week as the IPO market shows more signs of opening up. The VIX volatility index is hovering around 30, the IPO index is now up 58% from its March lows, and eight companies submitted initial filings, the most since late February.
Swiss oncology biotech ADC Therapeutics (ADCT) priced its upsized deal above the range at $19 to raise $233 million at a $1.3 billion market cap, making it the year’s largest biotech IPO by market cap. After postponing an IPO in October that pitched it at $1.8 billion, the company priced at a meaningful discount to peers this time around and soared 56%, continuing the hot streak for 2020 biotech IPOs. ADC’s lead candidate is an antibody drug conjugate in a pivotal Phase 2 trial for aggressive lymphomas, which showed a promising response rate in interim results.
Formed by Starwood Capital’s Barry Sternlicht, blank check Jaws Acquisition (JWSU) upsized its deal to raise $600 million, tying for the third-largest SPAC since 2018 (out of 130), and rose 2.6%. GigCapital3 (GIKU), semiconductor veteran Avi Katz’s third SPAC, raised $200 million targeting the technology, media, and telecommunications industry. Formed by former executives at Qualcomm and Ingram Micro, Novus Capital Corp (NOVSU) raised $100 million to acquire a smart tech business. With a string of recent SPAC IPOs trading below $10, both Novus and GigCapital3 were forced to add more warrants to their IPO terms, but still ended the week negative.
| 4 IPOs During the Week of May 11th, 2020 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 05/15 |
| ADC Therapeutics (ADCT) | $233M | $1,308M | 12% | +56% | +56% |
| Swiss Phase 2 biotech developing next-gen antibody drug conjugates for difficult cancers. | |||||
| Jaws Acquisition (JWSU) | $600M | $725M | 0% | +3% | +3% |
| Blank check company led by Starwood Capital founder Barry Sternlicht. | |||||
| Novus Capital Corp (NOVSU) | $100M | $127M | 0% | -1% | -1% |
| Blank check company targeting the smart technology innovations market. | |||||
| GigCapital3 (GIKU) | $200M | $258M | 0% | -1% | -1% |
| Third blank check company led by semiconductor veteran Avi Katz. | |||||
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Chinese delivery platform Dada Nexus (DADA) filed for an estimated $500 million US IPO, hot on the heels of Chinese cloud services provider Kingsoft Cloud (KC), which is currently up 36% from IPO. Payment processing company Shift4 Payments (FOUR) filed for an estimated $250 million IPO.
Four biotechs submitted initial filings. GenScript oncology spin-off Legend Biotech (LEGN) filed to raise $100 million, fibrosis biotech Pliant Therapeutics (PLRX) filed to raise $86 million, Swedish kidney disease biotech Calliditas Therapeutics (CALT) filed for a $75 million US IPO, and immuno-oncology biotech Kiromic BioPharma (KRBP) filed to raise $20 million.
Coro Global (CORO), which is developing what it believes will be the world’s first global payment application that includes gold, filed for a $13 million Nasdaq uplisting. North America-focused SPAC Mountain Crest Acquisition (MCACU) filed to raise $50 million.
| 8 Filings During the Week of May 11th, 2020 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Mountain Crest Acq. (MCACU) | $50M | SPAC | Chardan |
| Blank check company focusing on acquiring a private equity portfolio company. | |||
| Shift4 Payments (FOUR) | $300M | Technology | Citi |
| Provides secure payment processing solutions. | |||
| Calliditas Therapeutics (CALT) | $75M | Health Care | Citi |
| Swedish biotech developing novel therapies for inflammatory kidney disease. | |||
| Legend Biotech (LEGN) | $100M | Health Care | Morgan Stanley |
| Clinical stage CAR-T immuno-oncology biotech being spun out of GenScript. | |||
| Coro Global (CORO) | $13M | Technology | Aegis Cap. |
| Developing a gold-focused payment application and financial security platform. | |||
| Dada Nexus (DADA) | $500M | Technology | Goldman |
| Leading on-demand retail and delivery platform in China. | |||
| Kiromic BioPharma (KRBP) | $20M | Health Care | ThinkEquity |
| Preclinical biotech developing immunotherapies for blood cancers and solid tumors. | |||
| Pliant Therapeutics (PLRX) | $86M | Health Care | Citi |
| Phase 2 biotech developing therapies for the treatment of fibrosis. | |||
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Large US companies outside of the biotech space are also gearing up for IPOs. SelectQuote (SLQT) launched a $450 million offering planned for the coming week. Sales platform ZoomInfo (ZI) updated financials for the 1Q20 ahead of a rumored June IPO. Online car seller Vroom is also lining up a potential June IPO, reportedly submitting a confidential filing this past week.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 5/14/20, the Renaissance IPO Index was up 7.8% year-to-date, while the S&P 500 was down 11.7%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (UBER) and DocuSign (DOCU). The Renaissance International IPO Index was up 0.1% year-to-date, while the ACWX was down 20.1%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and Adyen.
