In the last week before Independence Day weekend, there are a few small IPOs to cap off a second quarter that was much improved from the lackluster first quarter. Syros Pharmaceuticals looks to continue the trend of insider buying on biotechs. Tactile Systems and GemphireTherapeutics plan to make a second effort on completing their offerings, while Global Medical REIT hopes to become just the second REIT of 2016.
SyrosPharmaceuticals ( SYRS ) plans to raise $60 million next week. The company is expanding on research of non-coding DNA to identify biomarkers that control the expression of disease-driving genes. Its lead candidate targets leukemia subsets and will enter a 40-patient Phase 2 trial in mid-2016. Insiders indicated an interest in purchasing up to $35 million (58% of the deal) in shares on the offering. At the midpoint, the company will command a post-IPO market cap of $363 million.
Two health care companies to IPO after delaying one week
Tactile Systems Technology ( TCMD ), which on Wednesday pushed its offering back to next week, is expected to raise $60 million at a market cap of $262 million. The company markets pneumatic compression devices for lymphedema and, unlike the year's other four medical device IPOs, Tactile boasts meaningful sales ($67 million LTM), growth (+35% in MRQ) and profitability (three consecutive years). Valued at a discount to peers (2.8x '16 sales vs. 4.2x average), it must continue to grow sales of its core Flexitouch system while keeping marketing spend in check as it navigates expiring patents and a negative reimbursement ruling from Medicare.
After delaying its IPO on Thursday, GemphireTherapeutics ( GEMP ) plans a $45 million IPO at a market cap of $125 million. Led by the former CEO of ProNAi Therapeutics (DNAI; -88%), Gemphire is developing a drug first discovered in 1998, which it believes can be an effective treatment with statins for high cholesterol. Insiders plan to invest $10 million on the IPO (22% of the deal).
Global Medical REIT (GMRE) hopes to raise $100 million at a market cap of $133 to repay debt and complete the acquisition of two properties in Connecticut and Pennsylvania. The company currently owns 12 fully leased health care facilities in eight states, generating $6.7 million in annualized rent. Its facilities include acute-care hospitals, orthopedic surgery centers and other health care centers, with an average age of 10 years.
Renaissance Capital's IPOCalendar - Week of6/27/2016
Price RangeShares Filed
Global Medical REITBethesda, MD
$10.00 - $12.009,100,000
Wunderlich SecuritiesOppenheimer & Co.
Healthcare REIT with a portfolio of 12 facilities.
Syros PharmaceuticalsCambridge, MA
$14.00 - $16.004,000,000
Cowen & CompanyPiper Jaffray
Developing gene expression therapies based on non-coding DNA research.
Tactile Systems TechnologyMinneapolis, MN
$14.00 - $16.004,000,000
Piper JaffrayWilliam BlairCanaccord Genuity
Sells at-home compression therapy devices for vascular swelling.
Gemphire TherapeuticsNorthville, MI
$11.00 - $13.003,750,000
JefferiesRBC Capital Markets
Developing a novel nonstatin therapy to treat high cholesterol.
Long Island Iced Tea Corp.Hicksville, NY
$6.50 - $6.501,538,462
Network 1 Financial SecuritiesAxiom Capital Management
Producer and distributor of non-alcoholic ready-to-drink iced tea.
Institutional investors rely on Renaissance Capital's Pre-IPO Research for these IPOs.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 10% year-to-date, while the S&P 500 is flat. Renaissance Capital's IPO ETF ( IPO ) tracks the index, and top ETF holdings include Alibaba (BABA), Synchrony Financial (SYF) and Citizens Financial Group (CFG). The Renaissance International IPO Index is down 3.2% year-to-date (as of Thursday's close), compared to +2.4% (also as of Thursday) for ACWX. Renaissance Capital's International IPO ETF ( IPOS ) tracks the index, and top ETF holdings include NN Group and Aena S.A.
The article US IPO Week Ahead: Two biotechs, one device maker and one health care REIT 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, the Renaissance IPO ETF (symbol: IPO) or the Global IPO Fund (symbol: IPOSX) , may have investments in securities of companies mentioned.