IPOs

US IPO Weekly Recap: Software and SPACs shine in a 7 IPO week

Seven IPOs and five SPACs entered public markets this past week, led by high-flying Jamf Holding (JAMF) and the largest SPAC ever Pershing Square Tontine Holdings (PSTHU). Four sizable biotechs all priced at the high end of the range or above, but returned an average of just 4%.

Jamf (JAMF) priced its IPO 44% above the original midpoint – the year’s highest – to raise $468 million at a $3.2 billion market cap. With solid growth and a sticky customer base, the Apple enterprise software provider has improved gross margins and achieved positive EBITDA. Jamf came to market in line with its SaaS peers, though outsized historical growth implied a premium was warranted. Jamf finished the week up 53%.

Rare disease biotech Annexon (ANNX) upsized and priced above the range to raise $251 million at a $640 million market cap. Targeting unmet needs in rare autoimmune and neurodegenerative diseases, the company’s lead candidate is completing 1b studies for Guillain-Barre Syndrome and plans to begin a Phase 2/3 study later this year. Both of its candidates are in multiple trials, but it has yet to show proof-of-concept in humans. Annexon finished up 4%.

Preclinical oncology biotech Nurix Therapeutics (NRIX) upsized and priced above the range to raise $209 million at a $754 million market cap. The company is targeting E3 ligases and expects submit an IND for its lead candidate in the 1Q21, with two more INDs slated for the 2H21. Nurix boasts collaborations with Gilead and Sanofi, and potential milestones of up to $4.8 billion. The deal finished flat.

Oncology biotech iTeos Therapeutics (ITOS) upsized and priced above the range to raise $201 million at a $681 million market cap. Spun out of the Ludwig Institute for Cancer Research, the company’s lead candidate is being studied in a Phase 1/2 trial as a monotherapy for advanced solid tumors. It is expected to begin expansion trials in the 3Q20 with data expected in the 1H21. iTeos finished flat.

Rare disease biotech Inozyme Pharma (INZY) upsized and priced at the high end to raise $112 million at a $386 million market cap. The company’s sole preclinical candidate is a novel therapy being developed for ENPP1 and ABCC6 deficiencies, rare calcification diseases with no approved therapies. The company plans to submit an IND/CTAs in the 2H20. Inozyme finished up 10%.

Environmental services firm Montrose Environmental (MEG) priced at the low end to raise $150 million at a $523 million market cap (including convertible preferreds). The company has made over 50 acquisitions since its 2012 inception, most recently Arkansas-based CTEH in April 2020 for $198 million. Pitching an ESG angle, Montrose finished up 45%.

Chinese micro-cap Skillful Craftsman Education Technology (EDTK) priced at the midpoint to raise $15 million at a $62 million market cap. The company provides over 400 vocational training courses in China, and its online education platforms had 60 million registered members as of September 30, 2019. Skillful Craftsman finished down 11%.

Pershing Square Tontine Holdings (PSTHU) raised $4 billion in the largest SPAC offering ever, the latest in a long list of 2020 SPAC milestones. Led by Bill Ackman, it is targeting a "Mature Unicorn," or a business with a market cap of $10 billion or more. The SPAC has an unusual structure, with no free founder shares, units offered at $20 rather than the traditional $10, and additional warrants granted to shareholders who do not redeem. Pershing Square Tontine Holdings finished up 8%.

Four other SPACs completed offerings. Digital entertainment SPAC Ascendant Digital Acquisition (ACND.U) raised $360 million, energy SPAC East Resources Acquisition (ERESU) raised $300 million, real estate SPAC Property Solutions Acquisition (PSACU) raised $200 million, and Asia-focused SPAC Greencity Acquisition (GRCYU) raised $40 million.

12 IPOs During the Week of July 20th, 2020
Issuer
Business
Deal
Size
Market Cap
at IPO
Price vs.
Midpoint
First Day
Return
Return
at 07/24
Jamf (JAMF) $468M $3,180M 44% +51% +53%
Provides software for enterprises to remotely deploy Apple devices.
Montrose Environmental (MEG) $150M $348M -6% +47% +49%
Provides a suite of environmental impact services.
Inozyme Pharma (INZY) $112M $386M 7% +10% +10%
Preclinical biotech developing protein therapies for rare calcification diseases.
Annexon (ANNX) $251M $640M 13% +4% +4%
Phase 1 biotech developing therapies for rare autoimmune diseases.
East Resources Acq. (ERESU) $300M $375M 0% +0% +0%
Blank check company formed by Terrence Pegula targeting the North American energy industry.
iTeos Therapeutics (ITOS) $201M $681M 12% +0% +0%
Phase 1/2 immuno-oncology biotech developing therapies for various cancers.
Nurix Therapeutics (NRIX) $209M $754M 12% +0% +0%
Preclinical biotech developing small molecule therapies for cancer.
Greencity Acquisition (GRCYU) $40M $53M 0% +0% +0%
Blank check company focused on businesses in Asia.
Ascendant Digital Acq. (ACND.U) $360M $435M 0% +3% +3%
Blank check company targeting an interactive digital entertainment business.
Pershing Square Tontine (PSTHU) $4,000M $4,000M 0% +7% +8%
Blank check company formed by Bill Ackman of Pershing Square targeting "Mature Unicorns".
Property Solutions Acq. (PSACU) $200M $257M 0% +0% +0%
Blank check company formed by Benchmark Real Estate Group targeting the real estate industry.
Skillful Craftsman (EDTK) $15M $62M 0% -5% -11%
Provides online education and technology services in China.


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Four IPOs and seven SPACs submitted initial filings. Chinese real estate platform KE Holdings (BEKE), which operates as Beike, filed to raise $1 billion in the US. Insurance software platform Duck Creek Technologies (DCT) filed to raise $200 million, and biotechs CureVac (CVAC) and Inhibikase Therapeutics (IKT) filed to raise $100 million and $18 million, respectively.

The tsunami of SPAC filings continued. Dragoneer Investment Group’s SPAC Dragoneer Growth Opportunities (DGNR.U) filed to raise $600 million, The Gores Group’s fifth SPAC Gores Holdings V (GRSVU) filed to raise $400 million, Fortress Investment's second SPAC Fortress Value Acquisition II (FAII.U) filed to raise $300 million, Russia-focused SPAC Kismet Acquisition One (KSMTU) filed to raise $250 million, defense SPAC NavSight Holdings (NSH.U) filed to raise $200 million, and warrantless SPACs ARYA Sciences Acquisition (ARYA) and FS Development (FSDC) filed to raise $125 million and $100 million, respectively.

11 Filings During the Week of July 20th, 2020
Issuer
Business
Deal
Size
Sector Lead
Underwriter
CureVac (CVAC) $100M Health Care BofA
German Phase 1 biotech developing mRNA-based cancer therapies and vaccines.
Dragoneer Growth Opp. (DGNR.U) $600M SPAC Citi
Blank check company formed by Dragoneer Investment Group.
Fortress Value Acq. II (FAII.U) $300M SPAC Deutsche Bank
Second blank check company formed by executives at Fortress Investment Group.
FS Development (FSDC) $100M SPAC Jefferies
Blank check company formed by Foresite Capital targeting a healthcare business.
KE Holdings (BEKE) $1,000M Real Estate Goldman
China's largest housing platform operating under the Lianjia and Beike brands.
NavSight Holdings (NSH.U) $200M SPAC Credit Suisse
Blank check company targeting a business that supports national security, intelligence and defense missions.
Duck Creek Tech. (DCT) $200M Technology Goldman
Provides a SaaS platform that streamlines business processes for P&C insurers.
Inhibikase Therapeutics (IKT) $18M Health Care ThinkEquity
Clinical stage biotech developing kinase inhibitors for Parkinson's and related disorders.
ARYA Sciences Acq. III (ARYA) $125M SPAC Jefferies
Third healthcare-focused blank check company formed by Perceptive Advisors.
Kismet Acquisition One (KSMTU) $250M SPAC Credit Suisse
Blank check company formed by the former CEO of MegaFon targeting a Russian business.
Gores Holdings V (GRSVU) $400M SPAC Deutsche Bank
Fifth blank check company formed by The Gores Group.


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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 7/23/20, the Renaissance IPO Index was up 36.8% year-to-date, while the S&P 500 was up 0.2%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Zoom Video (ZM) and Uber (UBER). The Renaissance International IPO Index was up 29.1% year-to-date, while the ACWX was down 6.2%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Xiaomi and Meituan-Dianping.
The article US IPO Weekly Recap: Software and SPACs shine in a 7 IPO week 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.

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