Last week, there were some red-hot IPOs. Just look at TubeMogul (TUBE), which was up 64% and Sage Therapeutics (SAGE), which spiked 67%.
Despite these success, there was actually underlying weakness in the IPO market. Many deals saw reductions in the pricing in order to gin up demand. Then again, there has been a flood of IPOs lately, which will continue this week, with 14 new stocks on deck. (Three of them are holdovers from last week: Medical Transcription Billing, Microlin Bio and Pfenex).
So let’s take a look at each:
New Stocks to Watch: Advanced Drainage Systems (WMS)
Expected Offering Date: Friday
Advanced Drainage Systems is a top manufacturer of high performance thermoplastic corrugated pipe, which helps with water management and drainage. Some of the customers include Home Depot (HD), Lowe’s (LOW), Ace Hardware, Menards and Do It Best. Last year, the company generated $1 billion in sales and $147 million in EBITDA. However, because of a leveraged buyout, the company has a $454 million debt load. Advanced Drainage Systems expects to issue 14.5 million shares at a range of $17 to $19. The lead underwriters include Barclays (BCS), Deutsche Bank (DB), Citi (C) and RBC Capital Markets.
New Stocks to Watch: Atara Biotherapeutics (ATRA)
Expected Offering Date: Thursday
Atara Biotherapeutics is a clinical-stage biotech company focused on creating therapeutics for serious unmet medical needs, such as muscle-wasting conditions and oncology. Its drugs aid in the growth and maintenance of muscle and many other body tissues. The lead product, PINTA 745, is in Phase 2 clinical trials. Then there is STM 434, which is expected to launch a Phase 1 trial in the second half of this year. Atara Biotherapeutics plans to offer 5 million shares at a range of $14 to $16. The lead underwriters include Goldman Sachs (GS) and Citi.
New Stocks to Watch: El Pollo Loco (LOCO)
Expected Offering Date: Friday
El Pollo Loco is a fast casual Mexican restaurant chain. A key part of the menu is fire-grilling citrus-marinated chicken. In fiscal 2013, revenues came to $314.7 million, but the company posted a net loss of $16.9 million. The company has more 400 locations in California, Arizona, Nevada, Texas and Utah. The typical restaurant is between 2,400 to 3,000 square feet and seats about 70 people. El Pollo Loco intends to issue 7.1 million shares at a range of $13 to $15. The lead underwriters include Jefferies, Morgan Stanley (MS) and Baird.
New Stocks to Watch: Immune Design (IMDZ)
Expected Offering Date: Thursday
Immune Design is a biotech company that develops therapeutics that enable a body’s immune system to fight disease. This is done by creating tumor-specific cytotoxic T cells, which can kill cancer. The lead drug, LV305, is currently in Phase 1 clinical trials. The company also believes that its core platform may eventually help target allergy and autoimmune diseases. Immune Design plans to sell 4.7 million shares at a range of $12 to $14. The lead underwriters include Jefferies and Leerink Partners.
New Stocks to Watch: Innocoll (INNL)
Expected Offering Date: Thursday
Innocoll is a biotech company that uses a proprietary collagen-based technology platform to develop biodegradable and fully bioresorbable products, which can be broken down by the body without the need for surgical removal. The lead products include XaraColl (treatment of post-operative pain) and and Cogenzia (treatment of diabetic foot infections). Both are expected to seek FDA approval by late 2015. Innocoll expects to issue 5.4 million shares at a range of $13 to $15. The lead underwriters include Piper Jaffray and Stifel.
New Stocks to Watch: Intersect ENT (XENT)
Expected Offering Date: Thursday
Intersect is a commercial-stage medical device operator. The company focuses primarily on patients that have ear, nose and throat conditions. For the most part, the products use bioabsorbable implant technology. Last year, the company posted revenues of $17.9 million, with a net loss of $18.4 million. But the revenues are ramping up, coming to $7.4 million in Q1. Intersect ENT plans to offer 5 million shares at a range of $11 to $13. The lead underwriters include J.P. Morgan (JPM) and Piper Jaffray.
New Stocks to Watch: Mapi-Pharma (MAPI)
Expected Offering Date: Friday
Mapi-Pharma is a biotech company that is developing generic drugs. The initial focus is on products for the treatment of multiple sclerosis and neuropathic pain. But the company also has other interesting drugs in development, such as replacements for Risperdal Consta and Johnson & Johnson’s (JNJ) Risperidone. Yet the IPO will be extremely important since Mapi raised its last round back in 2008. Currently, there is only $2.3 million in the bank. For its upcoming deal, the company plans to offer 2.7 million shares at a range of $13 to $15. The lead underwriter on the deal is Aegis Capital.
New Stocks to Watch: Ocular Therapeutix (OCUL)
Expected Offering Date: Friday
Ocular Therapeutix is a biotech company that targets therapies for diseases and conditions of the eye. To do this, Ocular uses its proprietary hydrogel platform technology. The lead products, which include OTX-DP and OTX-TP, help with ocular inflammation and pain. Unlike traditional approaches that rely on frequent dosing of eye drops, Ocular involves the use of a plug that efficiently releases the agent. The company plans to issue 5 million shares at a price range of $14 to $16. The lead underwriters include Morgan Stanley, Cowen & Company and RBC Capital Markets.
New Stocks to Watch: Orion Engineered Carbons (OEC)
Expected Offering Date: Friday
Orion is a top global manufacturer of carbon black, which is used to improve the properties of various materials like coatings and polymers used in tires. In 2013, the company posted revenues of $1.8 billion and operating income of $115.5 million. Orion Engineered Carbons expects to issue 18 million shares at a range of $21 to $24. The lead underwriters include Morgan Stanley, Goldman Sachs and UBS Investment Bank (UBS).
New Stocks to Watch: Spark Energy (SPKE)
Expected Offering Date: Thursday
Founded in 1999, Spark Energy is an independent retail energy services company. The company’s strategy has been to purchase natural gas and electricity supply from wholesalers and then resell these to residential and commercial customers. Spark is really a dividend play, as it plans to pay a quarterly distribution of $0.3625 per share. And the company does generate nice cash flows: In 2013, the adjusted EBITDA came to $33.5 million. Spark Energy plans to sell 3 million shares at a range of $19 to $21. The lead underwriters include Baird and Stifel.
New Stocks to Watch: Townsquare Media Group (TSQ)
Expected Offering Date: Friday
Townsquare is an integrated media and entertainment company. Some of its assets include radio stations, social media sites, and live events. In 2013, revenues hit $345.1 million and adjusted EBITDA was $94.9 million. Yet the company does have a heavy debt load, currently at $485.3 million. Townsquare Media expects to offer 8.3 million shares at a range of $14 to $16. The lead underwriters include Bank of America Merrill Lynch (BAC), Jefferies and RBC 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.
