The IPO Buzz: A Glimmer of Hope

If you missed the sliver of light flashing across Wall Street’s darkened sky as last week came to an end, it’s understandable. You had to be looking hard. The twinkling could be the sign of coming attractions.

In past years, it has taken about three to six weeks for the IPO calendar to come back to life after a stock market selloff had bottomed. That may have been the case on Friday, March 11, 2016, four weeks after the market’s closing lows on Feb. 11.

Two of the three major U.S. stock market indexes had reversed their recent corrections. The third fell short by a whisker.

The S&P 500 Index closed March 11 at 2,022.19, UP 10.6 percent from its Feb. 11 close of 1,829.08. The NASDAQ Composite Index closed at 4,748.47, UP 11.3 percent from its Feb. 11 close of 4,266.84. The Dow Jones Industrial Average closed at 17,213.31, UP 9.9 percent from its Feb. 11 close of 15,660.18. Note: If you track the recovery from the Dow’s intraday low on Feb. 11 of 15,503.01, then the blue-chip average is UP 11 percent.

Time and time again, the IPO calendar dries up when the stock market retreats, and this year has been no different. Nevertheless, bankers have been able to get a few IPOs out the door. The head count stands at eight – three special purpose acquisition companies, known as SPACs or “blank checks,” and five health-care companies. (Three were pharmaceuticals and two were biological products – sorry, guys, no biotechs.)

News You Can Use

Now here’s the surprise: All five health-care IPOs of 2016 closed Friday ABOVE their IPO prices. (Check here: IPOSCoop 2016 Pricings.) The average gain was over 27 percent. That’s not bad at all. Yes, it’s safe to say it out loud: That’s not a bad performance for such a maligned market.

Here is another passing note of interest: The U.S. Securities and Exchange Commission records show that only three companies withdrew plans to go public over the last four weeks. This tells you that the bankers have not lost faith in the IPO pipeline. They’re waiting for the 2016 IPO dawn to break.

A Close Look at the Calendar

This week, many IPO services carry four deals. Three are secondary offerings as their shares are already traded on other stock exchanges:

BioLight Life Sciences Ltd. (BOLT – proposed) is a surgical and medical instrument maker based in Israel. Its ordinary shares have been traded on the Tel Aviv Stock Exchange since December 2005 under the symbol “BOLT.TA”.

Hutchison China MediTech (HCM – proposed) is a Hong Kong-based biopharmaceutical company developing targeted therapies for oncology and immunological diseases. Its ordinary shares have been listed on the AIM market of the London Stock Exchange since May 19, 2006, under the symbol “HCM.L”.

Senseonics Holdings (SENS – proposed) is a Germantown, Maryland-based medical technology company developing glucose monitoring systems to improve the lives of people with diabetes.  Its stock has been listed on the OTC Bulletin Board since December 2015 under the symbol “SENH”.

The only IPO on this week’s calendar is Spring Bank Pharmaceuticals (SBPH – proposed).

Going Antiviral

Spring Bank Pharma is a Milford, Massachusetts-based clinical-stage biopharmaceutical company developing a novel class of antiviral therapeutics using its proprietary small molecule nucleic acid hybrid (SMNH) chemistry platform. This year, the company plans to conduct two clinical trials of an SMNH drug candidate known as SB 9200 – one trial to treat adults infected with the Hepatitis B virus, while the other trial will treat healthy adult volunteers inoculated with the respiratory syncytial virus (RSV) – according to the prospectus. RSV can kill premature babies, people over age 65, people with heart and lung disease, and people with weak immune systems.

The Buzz: Certain insiders have indicated an interest in purchasing up to $10 million of stock in this offering at the IPO price.

Bankers expect to price about 2.85 million American Depositary Shares at $13 to $15 each on Tuesday evening to trade Wednesday morning on the NASDAQ Global Market.

(For more information, please click here: Spring Bank Pharmaceuticals)

Looking into the week of March 21, 2016, the IPO calendar has one offering looking to raise about $75.2 million.

Stay tuned.

Disclosure: Neither the author nor anyone else on the staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and staff do not issue advice, recommendations or opinions.