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US IPO Weekly Recap: 3 healthcare IPOs trade flat


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Three unprofitable healthcare companies went public this past week, out of a potential eight IPOs. These included a large biotech targeting rare diseases, a medical device maker, and a synthetic DNA company. The group raised $390 million and averaged a disappointing 0% return.

Meanwhile, a pizza delivery startup secured $750 million , proving the resilience of the private markets.

Stem cell gene therapy biotech  Orchard Therapeutics  ( ORTX ) raised $200 million by pricing at the low end. It is one of four biotech IPOs this year (our of 54 total) to go public with a $1+ billion valuation. The stock opened up 21%, but finished its first day below issue. Even at the $14 low end, the IPO price represented a 63% premium to its capital raise in August. 

Axonics Modulation ( AXNX ) also had unusual trading. The company accelerated pricing by a day and priced an upsized IPO, both signs of higher demand, but broke issue. It raised $120 million at a market cap of $420 million, with 28% of the deal bought by insiders. Axonics carries heavy losses, and while its device for overactive bladder is possibly better than the competition, it has not yet proven that case through meaningful sales.

Twist Bioscience ( TWST ) priced at the $14 low end, a discount to its last round ($21.24 per share). The synthetic gene manufacturer raised $70 million at a $388 million market cap, with 44% coming from insiders. Backed by ARCH Venture, Twist more than doubled revenue in the MRQ, But Twist is highly unprofitable with negative gross margins, as well as customer concentration and a pending IP lawsuit.

The five IPOs that didn't get done included three new postponements: BankFlorida (BFL) and Eton Pharmaceuticals (ETON) and Tiziana Life Sciences (TLSA). The other two were YayYo (YAYO) and Alzheon (ALZH), which had previously attempted to price in October. All five are seeking to price in November.

3 IPOs During the Week of October 29th, 2018
Issuer
Business
Deal
Size
Market Cap
at IPO
Price vs.
Midpoint
First Day
Return
Return
at 11/02
Axonics Modulation ( AXNX ) $120M $420M 0% +0% +0%
Commercializing a neural implant for overactive bladder and incontinence.
Orchard Therapeutics ( ORTX ) $200M $1,290M -7% +0% +0%
Developing stem cell gene therapies for rare diseases.
Twist Bioscience ( TWST ) $70M $388M -7% +0% +0%
Manufactures synthetic genes and other DNA-based products.


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1 Filing During the Week of October 29th, 2018
Issuer
Business
Deal
Size
Sector Lead
Underwriter
Guardion Health Sciences (GHSI) $10M Health Care WallachBeth
Sells medical food and devices for retinal diseases.


IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 11/1/18, the Renaissance IPO Index was down 4.0% year-to-date, while the S&P 500 had a gain of 4.1%. Renaissance Capital's IPO ETF ( IPO ) tracks the index, and top ETF holdings include VICI Properties (VICI) and  Spotify (SPOT). The Renaissance International IPO Index was down 16.8% year-to-date, while the ACWX was down 9.8%. Renaissance Capital's International IPO ETF ( IPOS ) tracks the index, and top ETF holdings include Siemens Healthineers  and innogy

The article US IPO Weekly Recap: 3 healthcare IPOs trade flat originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital's Renaissance IPO ETF (symbol: IPO) , Renaissance International ETF (symbol: IPOS) , or separately managed institutional accounts may have investments in securities of companies mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: News Headlines , IPOs
Referenced Symbols: IPO , IPOS , ORTX , AXNX , TWST



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