An insurance platform and a medical device company went public this past week, both of which upsized their deals and priced above the range. Two SPACs also went public. The IPO market is continuing to open up, and an uptick in filings is setting the stage for a potentially busy June.
SelectQuote (SLQT), which distributes Medicare Advantage and other insurance products, raised $570 million at a $3.3 billion market cap in the largest IPO since early March. The company, which sees the majority of its earnings from Medicare Advantage and Supplement plans, had revenue growth of 44% in the FY19 and 48% in the fiscal YTD. SelectQuote finished up 33%.
Inari Medical (NARI), a maker of medical devices for venous diseases and blood clot removal, priced above its upwardly revised range to raise $156 million at a $1 billion market cap. The company is fast-growing and profitable, and operates in a hot space with a multi-billion-dollar market opportunity. Inari finished up 124% on its first day trading.
Glenview Capital's healthcare-focused SPAC Longview Acquisition (LGVWU) raised $360 million, and B. Riley Principal Merger II (BMRGU) raised $175 million to acquire a company with an enterprise value between $400 million and $1 billion.
| 4 IPOs During the Week of May 18th, 2020 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 05/22 |
| Inari Medical (NARI) | $156M | $1,027M | 27% | +124% | +124% |
| Makes minimally invasive medical devices for venous diseases. | |||||
| SelectQuote (SLQT) | $570M | $3,317M | 11% | +35% | +33% |
| Distributes Medicare Advantage and other insurance products. | |||||
| Longview Acquisition (LGVWU) | $360M | $435M | 0% | +0% | +0% |
| Blank check company formed by executives at healthcare-focused hedge fund Glenview Capital. | |||||
| B. Riley Merger II (BMRGU) | $175M | $232M | 0% | +0% | +0% |
| Second blank check company formed by diversified financial services firm B. Riley Financial. | |||||
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Vroom (VRM), an online marketplace for used cars, filed for an estimated $300 million IPO. Burning Rock Biotech (BNR) a Chinese biotech using DNA-sequencing to select cancer therapies, and inflammatory disease biotech Applied Molecular Transport (AMTI) both filed to raise $100 million. Preclinical biotechs Avidity Biosciences (RNA) and Vaxcyte (PCVX) and Royalty Pharma (RPHA.RC), a company which buys royalty interests from biopharmas, all filed to raise $100 million as well. Preclinical gene therapy biotech Generation Bio (GBIO) filed to raise $125 million.
Two SPACs, Hudson Executive Capital's Hudson Investment (HECCU) and Perceptive Advisors' ARYA Sciences Acquisition II (ARYBU) filed to raise $300 million and $125 million, respectively. Hudson Executive Investment is targeting fintech or healthcare business, and ARYA Sciences Acquisition II is focused on the healthcare industry.
| 9 Filings During the Week of May 18th, 2020 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Avidity Biosciences (RNA) | $100M | Health Care | Cowen |
| Preclinical biotech developing antibody therapies for muscle disorders. | |||
| Burning Rock Biotech (BNR) | $100M | Health Care | Morgan Stanley |
| Provides DNA sequencing-based cancer therapy selection tests in China. | |||
| Generation Bio (GBIO) | $125M | Health Care | JP Morgan |
| Preclinical biotech developing gene therapies for rare diseases. | |||
| Royalty Pharma (RPHA.RC) | $100M | Health Care | JP Morgan |
| Buys royalty interests in marketed and late-stage biopharmas. | |||
| Vaxcyte (PCVX) | $100M | Health Care | BofA |
| Preclinical biotech developing pneumococcal vaccines. | |||
| Hudson Investment (HECCU) | $300M | SPAC | Citi |
| Blank company formed by Hudson Executive Capital targeting fintech or healthcare. | |||
| ARYA Sci Acquisition II (ARYBU) | $125M | SPAC | Jefferies |
| Second healthcare-focused blank check company formed by Perceptive Advisors. | |||
| AMT (AMTI) | $100M | Health Care | BofA |
| Phase 1 biotech developing novel oral therapies for inflammatory diseases. | |||
| Vroom (VRM) | $300M | Technology | Goldman |
| Online used car marketplace. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 5/21/20, the Renaissance IPO Index was up 14.9% year-to-date, while the S&P 500 was down 8.7%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (UBER) and Spotify (SPOT). The Renaissance International IPO Index was up 4.4% year-to-date, while the ACWX was down 17.5%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Adyen and Meituan-Dianping.
