The IPO Buzz: Politics, Stocks and IPOs, Oh My

The Donald had a bad week and the stock market a good one.

It’s been said before: Stocks are bought in hope, held in greed and sold in fear. The forces driving investors’ emotions are the perception of interest rates, the perception of earnings, and at times, politics. Last week, politics ruled the waves.

Waltzing with the Bull

The Donald’s week has been covered almost non-stop, so let’s look at the three major U.S. stock market indexes instead. Two are on the brink of breaking out into a bull market – and one already has. When an index gains 20 percent from its recent low, it’s in a bull market. Consider:

The Dow Jones Industrial Average closed Friday, Aug. 5, 2016, at 18,543.53, UP 18.4 percent from 15,660.18, its recent closing low on Feb. 11, 2016, and UP 19.6 percent from 15,503.01, its intraday low on Feb. 11 – on the brink of a bull market.

The S&P 500 Index closed Friday, Aug. 5, at 2,182.87, UP 19.3 percent from 1,829.08, its recent closing low on Feb. 11, and UP 20.6 percent from 1,810.10, its intraday low on Feb. 11 – on the brink of a bull market.

The Nasdaq Composite Index closed Friday, Aug. 5, at 5,221.12, UP 22.4 percent from 4,266.84, its recent closing low on Feb. 11, and UP 24.0 percent from 4,209.76, its intraday low on Feb. 11 – already in a bull market.

Clinical Trials and IBD Drugs

That brings us to this week’s IPO market and a calendar of six names aiming to raise slightly over $300 million. Two are carryovers from last week, two are small-cap offerings of about $15 million each, and the other two deals are already attracting some attention. The eye-catching names are Medpace Holdings (MEDP – proposed) and Protagonist Therapeutics (PTGX – proposed).

Medpace Holdings is a Cincinnati-based clinical contract research organization. The company provides outsourced clinical development services to the biotechnology, pharmaceutical and medical device industries. Medpace believes it is differentiated from its competitors by its disciplined operating model centered on providing full-service Phase I-IV clinical development services and its therapeutic expertise.

Note: For the six months ended June 30, 2016, Medpace reported net income of $8.4 million on revenue of $205.5 million versus net income of $36,000 on revenue of $170.9 million for the same period a year ago.

Note: Medpace’s CEO and founder, Dr. August J. Troendle, has indicated an interest to buy up to $20 million of stock in the IPO.

Bankers plan to price 7 million shares at $20 to $23 each on Wednesday evening, Aug. 10, to trade on Thursday morning, Aug. 11.

Protagonist Therapeutics is a Milpitas, California-based clinical-stage biopharmaceutical company. Protagonist is focused on developing peptide-based new chemical entities to address significant unmet medical needs. Its primary focus is on developing oral peptide drugs for delivery to the gastrointestinal tissue compartment. The company believes its initial lead product candidates have the potential to transform the existing paradigm for treating inflammatory bowel disease (IBD) by offering earlier, safer, more effective and more convenient treatment via pills instead of injectable drugs, according to the prospectus. The most common types of IBD are ulcerative colitis and Crohn’s disease, the Mayo Clinic says.

Note: Certain existing stockholders and their affiliated entities have indicated an interest in purchasing an aggregate of up to about $40 million in stock in this IPO.

Bankers plan to price about 5.8 million shares at $11 to $13 each on Wednesday evening, Aug. 10, to trade on Thursday morning, Aug. 11.

The calendar for the week of Aug. 15 was clean and green at press time. But anything could happen on Monday morning, which could set the stage for the following week.

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 opinion.