The grueling correction has certainly taken a heavy toll on the market for new stocks. Consider that there were no offerings in January, which has not happened since 2011 (this is when the European crisis was in full force and spooked markets). Yet, this week should see things get back into action as there are five new stocks to watch.
Although, investors are likely to demand dirt-cheap valuations. After all, four the new stocks are in the high-risk biotech category. And yes, the performance of this sector has been horrific, with the iShares Nasdaq Biotechnology Index (IBB) already off 21% during the year.
OK, so what are the new stocks to watch this week? Well, let’s take a look at each:
New Stocks to Watch: Editas Medicine (EDIT)
Expected Offering Date: Wednesday
Editas Medicine is a biotech operator that focuses on a cutting-edge technology called “CRISPR” (clustered, regularly interspaced short palindromic repeats), which essentially allows for the editing of genes. Keep in mind that about 6,000 diseases are known to be caused by genetic mutations, but only 5% have any approved treatments.
The lead candidate is Leber Congenital Amaurosis, a genetic form of progressive blindness. But the company also has potential treatments for diseases of the liver, lung, blood and muscles. Also, last year it entered a coloration with Juno (JUNO) for a cancer drug.
Actually, Ebitas may be the most interesting new stocks to watch this week. For example, the company has attracted top-tier investors like Google (GOOG, GOOGL) Ventures and even Microsoft’s (MSFT) Bill Gates.
As for the upcoming IPO, the company plans to issue 5.9 million shares at a range of $16 to $18 and the lead underwriters include Morgan Stanley (MS), J.P. Morgan (JPM) and Cowen & Company.
New Stocks to Watch: BeiGene (BGNE)
Expected Offering Date: Thursday
BeiGene, which is based in China, uses immunotherapy to combat cancer. This involves leveraging a patient’s own immune system, which should provide for improved outcomes and fewer side effects.
There are two lead candidates. One is BGB-3111, a Phase-2 drug that is focused on lymphomas, and then there is also BGB-283, which is for solid tumors. The drug involves a collaboration with Merck (MRK).
In terms of the IPO, the company expects to sell 5.5 million shares at a price of $22 to $24 and the lead underwriters include Goldman Sachs (
GS), Morgan Stanley and Cowen & Company.
New Stocks to Watch: PLx Pharma (PLXP)
Expected Offering Date: Tuesday
PLx Pharma is a late-stage biotech operator that has developed a system that provides for safer and more effective aspirin delivery. This is done by releasing the drug in the duodenum, which is the first part of the small intestine immediately below the stomach. As a result, there are fewer gastrointestinal side effects.
Now a key factor that will make PLx Pharma an interesting play among the new stocks to watch this week is that it has already gained FDA approval for its lead candidate, PL2200 Aspirin 325 mg. Oh, and there is also another late-stage drug in development, which is for an 81 mg dose.
Regarding the IPO, PLx Pharma intends on issuing 3.8 million shares at a range of $17 to $19 and the lead underwriters include Raymond James, Maxim Group LLC and Janney Montgomery Scott.
Although, regarding the new stocks to watch this week, this one may have the toughest time with its deal because the company is still in the early stages of development, which means the risk level is still fairly high.
New Stocks to Watch: Mapi Pharma (MAPI)
Expected Offering Date: N/A
Mapi Pharma is a clinical stage biotech company that is focused on developing extended-release versions of existing commercially successful products. The company believes that its approach allows for improved patient compliance and reduced side effects.
The lead candidate is Glatiramer Acetate Depot, which is a once-monthly injection for relapsing-remitting multiple sclerosis (the treatment is in Phase 3 trials). Consider that current alternatives in the market require much more frequent doses, such as on a daily basis.
There are other interesting treatments in the pipeline for Mapi Pharma as well. One is Pregabalin ER, which is a form of Pfizer’s (PFE) Lyrica and the other is Risperidone LAI+, which is a formulation of Johnson & Johnson’s (JNJ) Risperdal Consta.
Mapi Phamra intends on offering 3.1 million shares at a range of $15 to $17 and the lead underwriter is JMP Securities (JMP).
New Stocks to Watch: Shimmick Construction (SCCI)
Expected Offering Date: N/A
Among the new stocks to watch this week, Shimmick Construction is the only one in the non-biotech sector. That is, the company is a top player in heavy civil construction, which has been awarded over $5 billion in public infrastructure projects since 2001. The company helps build such massive structures like bridges, dams, transit & rails systems and airports.
Besides the core services business, Shimmick also owns and operates a premium hard rock quarry in Madera, California. It currently has about 62 million tons of reserves.
In terms of the financials, they are definitely solid. For the first nine months of last year, revenues came to $360.6 million, up 64% on a year-over-year basis, and EBITDA was $16 million.
Shimmick expects to sell 6.25 million shares at a range of $11 to $13 and the lead underwriter is FBR Capital Markets.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also 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.
