Last week, five IPOs came to the market. And of course, it was not easy, as the overall markets were in the bear mode. Maybe the IPOs this week will have better luck.
Looking back at last week, only one deal had a standout performance: StoneCo (NASDAQ:STNE). The company, which is a Brazilian payments processor, saw its shares jump 31%. As for the worst deal, it was YETI (NYSE:YETI), a manufacturer of premium coolers and other outdoors equipment, ended the week down about 9%
Even though the markets started this week on a positive note, it will likely remain a slog for new issues. Keep in mind that there has already been a postponement of a deal, BankFlorida. The local bank — with operations in Palm Beach Gardens, Florida — was planning to issue 6.2 million shares at a range of $10 to $11 (at the mid-range, the market cap would be $75 million).
This means that this week will see only four biotech companies hit the markets. So let’s take a look at each of them:
IPOs This Week: Eton Pharmaceuticals
Eton Pharmaceuticals is a specialty pharma operator, which uses the FDA’s 505(b)(2) regulatory pathway. This means that the company leverages molecules that have been approved that allow for new formulations. This could mean higher strengths for the drugs or dosages. The result is usually lower costs and faster development times.
The company has a variety of drug candidates in the pipeline. One includes EM-100, which is a preservative-free formulation for the treatment of allergic conjunctivitis. Approval is expected some time in 2019.
Then there is ET-103. This is an oral formulation for hypothyroidism. Consider that the market size is about $2.6 billion.
The IPO of Eton Pharmaceuticals this week has an expected price of $6 and the company plans to issue 3 million shares. The lead underwriter is National Securities and the ticker symbol is ETON.
IPOs This Week: Orchard Therapeutics
Based in London, Orchard Therapeutics is a commercial-stage biotech company. It focuses on treatments that use autologous ex-vivo gene therapies. Essentially, these involves transforming a person’s stem cells to create gene-modified drugs.
The company’s commercial-stage product is Strimvelis, which is for adenosine deaminase severe combined immunodeficiency. There are also five candidates at the clinical stage. For the most part, the target populations are for those patients with rare diseases.
Regarding the IPO this week, Orchard Therapeutics expects to issue 13.3 million shares at a range of $14 to $16 (assuming the deal is priced at the mid-range, the valuation would be about $1.4 billion). The lead underwriters include JP Morgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and Cowen. The public offering is expected to list under the ticker symbol of ORTX.
IPOs This Week: Twist Bioscience
Twist Bioscience is a developer of innovative systems to synthesize DNA which is then sold to other researchers. Their streamlined process is based on the engineering principles behind the semiconductor industry and features a silicon platform that revolutionizes DNA synthesis. To do this, Twist has created its own software, scalable infrastructure and e-commerce platform. The company currently sells its synthesized DNA to over 600 customers.
The market for synthetic biology products is certainly large. (Synthetic here means synthesized in a lab, not artificial.) Last year, it was at $4.4 billion and it is forecast to hit $13.9 billion by 2022.
For fiscal 2018, revenues shot up by 133% to $17 million. Although, the net loss was $51.4 million.
Twist plans to issue 5 million shares at a range of $14 to $16, with a ticker symbol of TWST. The lead underwriters include JPM and Cowen.
IPOs This Week: Axonics Modulation Technologies
Axonics Modulation Technologies is a biotech company that develops minimally invasive sacral neuromodulation, or SNM, solutions. These are used generally for those with overactive bladders, fecal incontinence or urinary retention. Axonics’ technology sends mild electrical pulses to nerve areas to help reduce the symptoms. Some of the benefits include rechargability, a smaller form factor and longevity (it can last about 15 years).
The company has marketing approvals in Europe, Canada and Australia. And as for the U.S., it will submit for pre-marketing approval in the first quarter of 2019. The current market for SNM solutions is about $605 million.
As for this week’s IPO, Axonics plans to issue 6.7 million shares at a range of $14 to $16. The lead underwriters include Bank Of America (NYSE:BAC) and Morgan Stanley (NYSE:MS). The proposed ticker symbol is AXNX.
Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.