Agios Pharmaceuticals (AGIO) popped for an opening-day gain of 73.8 percent. Bankers offered 5.9 million shares at $18 each, up from its initial filing range of 5 million shares at $14 to $16 each. From its prospectus: Agios reported 12-month collaboration revenues of $25.1 million and its collaborator, Celgene, bought about $12.7 million of stock in the offering.
Onconova Therapeutics (ONTX) popped for an opening-day gain of 32.5 percent. Bankers offered 5.16 million shares at $15 each, up from its initial filing range of 4.6 million shares at $12 to $14 each. From its prospectus: Onconova reported 12-month collaboration revenues of $47.1 million and its collaborator, Baxter Healthcare, bought about $27 million of stock in the offering.
Cellular Dynamics International (ICEL) flopped for an opening-day loss of 20.8 percent. Bankers offered 3.84 million shares at $12 each, the low end of its $12- to $14-per-share price range. From its prospectus: Cellular Dynamics reported 12-month collaboration revenues of $1.5 million, but none of its collaborators were reported to be buying stock in the offering.
Conatus Pharmaceuticals (CNAT) flopped for an opening-day loss of 13.6 percent. Bankers offered 5 million shares at $11 each, the mid-point of its $10- to $12-per-share price range. From its prospectus: Conatus Pharmaceuticals reported no collaboration revenues for the 12 months ended March 31, 2013. Insiders were reported to be interested in buying up to $10 million of stock, but there was no mention of any collaborators buying stock in the offering.
Thanks, But No Thanks
Last week gave us a couple of examples of what can happen when people back out of a deal – take Jones Energy (JONE) and Marlin Midstream Partners, LP (FISH).
Jones Energy offered 12.5 million shares at $15 each, DOWN from 14 million shares at $17 to $19 each, and the number of joint-lead managers had shrunk to five from six. Citigroup’s name disappeared from the cover of the prospectus. And there went its underwriting commitment and its placement power to have sold its allocation. Jones Energy started trading at $14.04, DOWN 96 cents from its initial offering price.
Marlin Midstream offered 6.875 million shares at $20 each, UP from 6.25 million shares. The pre-pricing buzz, according to numerous sources, was that the deal was well multi-times oversubscribed and some services even rated the deal as a “hot issue.” Just before being priced, whispers circulated that an institutional buyer was said to have backed out of the deal. All we really know is that the offering was increased by 10 percent and Marlin Midstream’s IPO started trading at $19.51, DOWN 49 cents from its initial offering price.
Home and Health
This brings us to this week’s calendar of seven IPOs. They expect to raise over $1.7 billion. The American Homes 4 Rent (AMH – proposed), Control4 Corporation (CTRL – proposed) and Sprouts Farmers Market (SFM – proposed) offerings are expected to attract some attention.
American Homes 4 Rent is a Malibu, California-based REIT focusing on acquiring, renovating, leasing and operating single-family homes as rental properties. As of June 30, 2013, American Homes owned about 17,949 single-family properties located in selected sub-markets of metropolitan areas in 21 states. Founded in 2012, the company has about 157 employees.
Underwriters plan to offer 44.1 million shares of American Homes at $16 to $18 each to raise about $750 million. The IPO is expected to be priced Wednesday evening and trade Thursday morning on the New York Stock Exchange. The joint-lead managers are: Goldman Sachs, BofA Merrill Lynch, J.P. Morgan and Wells Fargo Securities. The co-managers are: Citigroup, Credit Suisse, FBR, Jefferies and Raymond James.
Control4 is a Salt Lake City-based provider of automation and control solutions for the home to integrate music, video, lighting, temperature, security, communications and other functions into a unified home automation solution. For the 12-month period ended March 31, 2013, Control4 reported a loss of $2.5 million on revenues of $113.3 million. Founded in 2003, the company has about 333 employees.
Underwriters plan to offer 4 million shares of Control4 at $15 to $17 each to raise about $64 million. The IPO is expected to be priced Thursday evening and trade Friday morning on the NASDAQ Global Market. The joint-lead managers are: BofA Merrill Lynch and Raymond James. The co-managers are: Canaccord Genuity, Cowen and Needham.
Sprouts Farmers Markets is a Phoenix-based specialty grocery store offering natural and organic food. The company focuses on health and wellness includes the sales of fresh produce, bulk foods, vitamins and supplements, other grocery products, meat and seafood, bakery, dairy, frozen foods, body care and natural household items. Sprouts Farmers has more than 150 locations in Arizona, California, Colorado, New Mexico, Texas, Oklahoma and Utah. For the 12-month period ended March 31, 2013, Sprouts reported net income of $26 million on revenues of $2.1 billion. Founded in 2002, the company has about 13,200 employees.
Underwriters plan to offer 18.5 million shares of Sprouts Farmers Market at $14 to $16 each to raise about $277.5 million. Sprouts Farmers plans to sell 17.7 million shares and selling shareholders plan to sell 800,000 shares in this offering. The IPO is expected to be priced Thursday evening and trade Friday morning on the NASDAQ Global Market. The joint-lead managers are: Goldman Sachs, Credit Suisse and BofA Merrill Lynch. The co-managers are: Apollo Global Securities, Barclays, Deutsche Bank Securities, UBS Investment Bank, Guggenheim Securities and Wolfe Research Securities.
People have been looking at Fairway Group Holdings (FWM), a New York City grocery store, as a comparison. Fairway Holdings priced 13.7 million shares at $13 each on April 16, 2013. The IPO closed on Friday, July 26 at $24.75, UP 90.4 percent from its initial offering price.
This brings us to next week. At press time, there was one IPO on the calendar for the week of Aug. 5. It is expected to raise about $65 million. As we have seen many times in today’s IPO market, the calendar can fill up quickly.
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 opinions.