The IPO Buzz: Record Highs and IPO Favorites

With the NASDAQ Composite and the S&P 500 Index closing Friday at record highs and the Dow Jones Industrial Average not too far behind, the IPO calendar seems to be groping for leadership. This week, it falls back on favorites from the past – limited partnerships and health-care providers.

All told, the calendar has six IPOs on its launching pad. Two are limited partnerships and four are health-care providers. They are expected to raise about $875 million.

LPs and Power to the People

Over the last 12 months, the calendar produced 15 oil and gas IPOs, according to the U.S. Securities and Exchange Commission filings. Nine of the names ended with the initials “L.P.” The last to go public was the Feb. 5, 2015, offering of Columbia Pipeline Partners LP (CPPL), a natural gas transmission limited partnership.

This week’s calendar lists two “L.P.” offerings. They are Black Stone Minerals, L.P. (BSM – proposed) and Enviva Partners, L.P. (EVA – proposed).

Black Stone Minerals, L.P. is a Houston-based oil and gas limited partnership. The company believes it is one of the largest owners of oil and natural gas mineral interests in the United States. It owns mineral interests in about 14.5 million acres, owns nonparticipating royalty interests in 1.2 million acres and overriding royalty interests in 1.4 million acres, which includes ownership in about 40,000 producing wells. Black Stone’s mineral and royalty interests are located in 41 states and 62 onshore basins in the continental United States.

The company traces its origin back to 1876, when W.T. Carter & Bro., a predecessor of Black Stone Minerals, was established as a lumber company in Southeast Texas. W.T. Carter & Bro. acquired significant land holdings for timber, and those acquisitions typically included mineral interests.

Note: Black Stone plans to make quarterly cash dividends of 26.25 cents per share (annualized at $1.05) to yield about 5.25 percent based on the mid-point of its price range.

(For more information, please click here: Black Stone Minerals, L.P.)

Enviva Partners, L.P. is a Bethesda, Maryland-based limited partnership. The company believes it is the world’s largest supplier of utility-grade wood pellets – ranked by production capacity – to major power generators. Enviva reports that its existing production constitutes about 16 percent of the current global supply of utility-grade wood pellets.

Note: Enviva plans to make quarterly cash distributions of 41.25 cents per share (annualized at $1.65) to yield about 8.25 percent based on the mid-point of its price range.

(For more information, please click here: Enviva Partners, L.P.)

A Healthy Blueprint

Turning to the health-care sector, this week’s calendar shows two new faces and two small-cap offerings that have been floating around for some time without pricing dates. The new faces are Blueprint Medicines (BPMC – proposed) and CoLucid Pharmaceuticals (CLCD – proposed).

Blueprint Medicines is a Cambridge, Massachusetts-based biopharmaceutical company focused on designing drugs to treat several types of cancer, including liver cancer, and a rare genetic disease. The company specializes in creating drugs to treat genomically defined diseases driven by abnormal kinase activation. A kinase is a type of enzyme. Blueprint Medicine’s initial investors included funds managed by Fidelity Biosciences and Third Rock Ventures, according to its prospectus.

(For more information, please click here: Blueprint Medicines)

CoLucid Pharmaceuticals is a Burlington, Massachusetts-based Phase 3 clinical-stage biopharmaceutical company working on a pill to bring faster pain relief from migraine headaches without the side effects of the most common drugs. CoLucid is developing an innovative and proprietary small molecule, which it describes as the first new mechanism of action in the last 20 years, according to its prospectus. The company’s lead product, lasmiditan, is an oral tablet to treat migraine headaches in adults without the sensitivity to light and sound – and without the nausea – linked to the most commonly used therapies. Migraine headaches affect about 12 percent of the U.S. population, according to the American Migraine Association, CoLucid pointed out in its prospectus.

(For more information, please click here: CoLucid Pharmaceuticals)

Rounding out the health-care list: OpGen (OPGN – proposed) is a Gaithersburg, Maryland-based early commercial-stage company using molecular testing and bioinformatics to help health-care providers combat multi-drug-resistant bacterial infections. The company is looking to raise about $15 million. Viking Therapeutics (VKTX – proposed) is a San Diego, California-based clinical-stage biopharmaceutical company focused on the development of novel first-in-class or best-in-class therapies for metabolic and endocrine disorders. The company is looking to raise only $20 million.

Looking into next week, the IPO calendar has two offerings. Nevertheless, the calendar has been known to fill up quickly on Monday mornings.

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.