The IPO Buzz: Life Time Prices Slimmer IPO

Life Time Group Holdings, Inc. (LTH) cut the size of its IPO – by about 15.6 percent – and priced the deal at $18 – the bottom of its $18-to-$21 range – on Wednesday night (Oct. 6, 2021). The downsizing of Life Time’s initial public offering followed the delay – for the second night – in the pricing of the iFIT Health & Fitness (IFIT proposed) IPO.  This was not the scenario that anyone imagined when the week began.  Some blame this on “Peloton fatigue.”  The rocky U.S. stock market didn’t help.

Before the market opened on Thursday, iFIT Health & Fitness announced that it had postponed its IPO “due to adverse market conditions.” NordicTrack parent  iFIT competes with Peloton (PTON).

Life Time’s stock opened at $16.57 at 10:42 a.m. EDT today on volume of 1.8 million shares, MarketWatch reported. That opening trade – 7.9 percent below Life Time’s IPO price at $18 – marks this one as a broken deal. The stock is now trading at around $17.43.

The fitness club company’s IPO was trimmed at pricing on Wednesday night to 39 million shares – down from 46.2 million in the prospectus – and the stock was priced at $18 (the low end of its range) to raise $702 million. That amount fell about $200 million short of the IPO’s estimated proceeds under its filed terms.

This deal marks Life Time’s second time to go public. The Minnesota-based company’s first IPO was in 2004. Leonard Green Partners, a private equity company, led an investor group to buy Life Time in June 2015.

Goldman Sachs, Morgan Stanley, BofA Securities, Deutsche Bank Securities, J.P. Morgan, Wells Fargo Securities, BMO Capital Markets, Mizuho Securities and RBC Capital Markets are the joint book-runners of the Life Time IPO.

The Dow’s jump of more than 500 points today, spurred by the short-term debt-limit deal, is creating a better mood ahead of the pricing tonight of four healthcare IPOs.

With any luck, IPO investors will be able to forget about the week when bankers tried to channel their inner Olivia Newton-John.

“I Want a New Drug”

Biotech IPOs are back in play this week. One started trading today – Theseus Pharmaceuticals (THRX) – and shot up about 28 percent from its IPO price. Four more healthcare deals – three biotechs and one from a biotech lab platform company – are on the IPO Calendar. Fans of ‘80s music may want to cue up a little Huey Lewis & the News while they work. (Confession: I used to blast “I Want a New Drug” in my car on my way to work back in the day.)  

Theseus Pharmaceuticals (THRX) upsized its IPO at pricing on Wednesday night to 10 million shares – up from 8.3 million shares in the prospectus – and priced the stock at $16 – the top of its $14-to-$16 range – to raise $160 million. The IPO was seen as “the biotech deal of the week.”

Orbimed Advisors is among the principal stockholders of Theseus Pharmaceuticals, a cancer biotech whose lead drug candidate, THE-630, is a pan-variant kinase inhibitor to treat gastrointestinal stromal tumors – known as GIST. The company is based in Cambridge, Massachusetts.

Jefferies, SVB Leerink, Cantor and Wedbush PacGrow are the joint book-runners of the Theseus Pharmaceuticals IPO.

Pyxis Oncology (PYXS proposed) is up next. Early Thursday morning, Pyxis Oncology increased the size of its IPO to 9.5 million shares, up from 8.34 million shares, and kept the price range at $14 to $16, in an S-1/A filing dated Oct. 7, 2021. The IPO is set for pricing Thursday night – to trade Friday on the NASDAQ.

Even before Pyxis Oncology upsized its IPO, some saw the deal as giving Theseus Pharmaceuticals a run for its money as the best biotech of the week.

Bank of America Securities, Jefferies, Credit Suisse, William Blair and LifeSci Capital are the joint book-runners.

Pyxis Oncology, based in Cambridge, Massachusetts, is a preclinical oncology company focused on developing an arsenal of next-generation therapeutics to target difficult-to-treat cancers and improve the quality of life for patients.

“We develop our product candidates with the objective to directly kill tumor cells, and to address the underlying pathologies created by cancer that enable its uncontrollable proliferation and immune evasion,” the prospectus says. “Since our launch in 2019, we have developed a broad portfolio of novel antibody drug conjugate, or ADC, product candidates, and monoclonal antibody, or mAb, preclinical discovery programs that we are developing as monotherapies and in combination with other therapies.”

Two more biotechs are set for pricing Thursday night – AEON Biopharma (AEON proposed) and Cognition Therapeutics (CGTX proposed) – along with IsoPlexis (ISO proposed), which had sold 150 of its commercial lab platform systems globally as of June 30, 2021, the prospectus says. IsoPlexis says its lab platform streamlines drug R&D by combining proteomics (gene therapy) and single-cell therapy research into a single platform.

For more information, please check the IPO Calendar and click on a company’s name, which will take you to the IPO Profile and a link to the prospectus.)

(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)

Disclosure: Nobody on the staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.