The IPO calendar kicks off the merry month of May with six offerings. Two are from the energy sector, while three are from the biotech sector and one is a real estate investment trust (REIT). They are expected to raise over $1.7 billion, but more on this in a minute.
Over the years, May’s IPO traffic has turned out to be an “above average” month for its calendar, according to the U.S. Securities and Exchange Commission filings. Here is what the figures show:
- May 2016: 17 IPOs were priced (average month for 2016 – 9.1 IPOs)
- 5-year May average (2012 through 2016): 16.2 IPOs were priced (average month for this period – 15.9 IPOs) and
- 17-year May average (2000 through 2016): 16.4 IPOs (average month for this period – 15 IPOs).
However, this May has one thing none of the other months had. The NASDAQ Composite Index ended April above the 6,000 mark – three days after topping that milestone for the first time. At Friday’s close, the NASDAQ stood at 6,047.61, UP 12.3 percent for 2017, and UP 41.7 percent from its recent low of 4,268.76 set on Feb. 9, 2016. In addition, Thomas W. Farley, president of the NYSE Group, was seen on CNBC as being bullish on April’s IPO market and bullish on May. And this sets the stage for May.
This week, there are six IPOs: Antero Resources Midstream Management (AMGP – proposed); Biohaven Pharmaceutical Holding (BHVN – proposed); KKR Real Estate Finance Trust (KREF – proposed); Liberty Oilfield Services (BDFC – proposed); Ovid Therapeutics (OVID – proposed) and UroGen Pharma (URGN – proposed). Let’s take a look.
Antero Resources Midstream Management, based in Denver, is a growth-oriented limited partnership formed by Antero Resources to own, operate and develop midstream energy assets to service Antero Resources’ rapidly increasing production. Antero Resources is the second-largest natural gas producer in Appalachia and the largest natural gas liquids (NGL) producer in the region, the prospectus says. The company’s assets are located in the liquids-rich southwestern core of the Marcellus Shale in the northwestern part of West Virginia and the liquids-rich core of the Utica Shale in southern Ohio.
Note: All of the common shares sold in this IPO are being offered by the selling shareholder. The company will not receive any of the proceeds from this offering. Upon completion of the IPO, the selling shareholder will own about 80 percent of the outstanding common stock.
Liberty Oilfield Services, based in Denver, provides specialized stimulation services to optimize well production. The company offers high-quality hydraulic fracturing or “fracking” and engineering services to onshore oil and natural gas E&P (exploration and production) companies.
From the prospectus: Liberty Oilfield estimates – based on preliminary results – that revenue will be within a range of $251 million to $253 million for the three months ended March 31, 2017, compared with revenue of $58.2 million for the same period a year ago.
Based on preliminary results, Liberty Oilfield estimates that net income will be within a range of $8.1 million to $10.1 million for the three months ended March 31, 2017, compared with a net loss of $21.8 million for the same period a year ago.
Biohaven Pharmaceutical Holding, based in New Haven, Connecticut, is a clinical-stage biopharmaceutical company with a portfolio of innovative, late-stage product candidates targeting neurological diseases, including rare disorders. The company’s product candidates are small molecules based on two distinct platforms — calcitonin gene-related peptide (CGRP) receptor antagonists and glutamate modulators – “which we believe have the potential to significantly alter existing treatment approaches across a diverse set of neurological indications with high unmet need in both large markets and orphan indications,” according to the prospectus. One of its product candidates is being developed for the acute treatment of migraine headaches, according to the prospectus.
Note: Insiders indicated an interest to buy $70 million of the $125 million of stock being offered.
Ovid Therapeutics, based in New York City, is a biopharmaceutical company focused exclusively on developing impactful medicines for patients and families living with rare neurological disorders. The company’s drug candidate, OV101, is in development to treat the symptoms of Angelman syndrome and Fragile X syndrome. Ovid is also developing OV935 in collaboration with Takeda Pharmaceutical Company Limited to treat rare epileptic encephalopathies.
Note: Insiders indicated an interest to buy $20 million of the $80 million of stock being offered.
UroGen Pharma, based in Israel, is a clinical-stage biotechnology company working on transforming local therapy for urological pathologies. The company is developing novel pharmaceutical solutions for several forms of non-muscle invasive urothelial cancer, including low-grade bladder cancer, carcinoma in-situ bladder cancer and low-grade upper tract urothelial carcinoma, an unmet medical need for which there are no FDA-approved drugs.
Note: Insiders indicated an interest to buy $20 million of the $45 million of stock being offered.
KKR Real Estate Finance Trust, based in New York City, is a real estate finance company focusing on originating and acquiring senior loans secured by commercial real estate (CRE) assets. Its investment strategy is to originate or acquire senior loans collateralized by institutional-quality CRE assets that are owned and operated by experienced and well-capitalized sponsors and located in liquid markets with strong underlying fundamentals.
(For more information, please check the profiles of these companies on IPOScoop.com’s website.)
May’s in Bloom
This brings us to the week of May 8 and the IPO calendar of three offerings. This is only a start. It could change when the SEC’s filing window re-opens for business on Monday morning.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinion.