Since the beginning of September 2013, 22 of the 105 IPOs that have been priced were bio-IPOs, according to the U.S. Securities and Exchange Commission filings. Their scorecard has been eye popping. Nineteen were in the winners’ circle by the close of Friday, Jan. 24, 2014, three were losers, and the average gain for all 22 was 72.7 percent.
The NASDAQ Composite Index was UP 15 percent over the same time period. It closed on Friday at 4,128.17, UP from 3,589.87 on Aug. 30, 2013.
The top three bio-IPO aftermarket performers were: Relypsa (RLYP) – UP 245.8 percent from its initial offering price; Acceleron Pharma (XLRN) – UP 226.9 percent and MacroGenics (MGNX) – UP 146.9 percent. Each of their prospectuses had some magic words sprinkled among their 170 or more pages. They were: Insiders indicating an interest to buy shares at the offering prices, collaboration agreements and collaboration revenues. Naturally, these aren’t the only reasons for the IPOs’ success, but these words are a start.
Relypsa is a Redwood City, California-based pharmaceutical company focused on the development and commercialization of non-absorbed polymeric drugs.
Required reading
Prospectus: “Certain of our existing investors, including a limited partner of two of our existing investors, and one of our executive officers have agreed to purchase an aggregate of 1,807,084 shares of our common stock (or approximately $19.9 million) in this offering at the initial public offering price.” (Cover Page)
Acceleron Pharma is a Cambridge, Massachusetts-based clinical stage biopharmaceutical company focused on the discovery, development and commercialization of protein therapeutics for cancer and rare diseases.
Required reading
Prospectus: (1) “Our Partnership with Celgene … Additionally, we may receive up to $560.0 million of potential development, regulatory and commercial milestone payments …” (Page 3); and (2) Collaboration Revenues for the nine months ended September 30, 2013, of $36 million.” (Page 39)
MacroGenics is a Rockville, Maryland-based a clinical-stage biopharmaceutical company focusing on discovering and developing monoclonal antibody-based therapeutics to treat cancer and autoimmune diseases.
Required reading
Prospectus: (1) “We have entered into strategic collaborations with Les Laboratoires Servier and Institut de Recherches Servier, or collectively, Servier, Gilead Sciences, Inc., or Gilead, Boehringer Ingelheim International GmbH, or Boehringer, and Pfizer, Inc., or Pfizer, among others. Under our current strategic collaborations, we have received approximately $106 million in non-equity funding during the three-year period ended June 30, 2013 …” (Page 2) and (2) “Collaboration Revenues for the six months ended June 30, 2013, of $22.9 million.” (Page 52)
On the Front Burner
Against that backdrop, let’s take a closer look at this week’s bio-IPO traffic. They are: Cara Therapeutics (CARA – proposed), Dicerna Pharmaceuticals (DRNA – proposed) and Ultragenyx Pharmaceutical (RARE – proposed)
Cara Therapeutics is a Shelton, Connecticut-based clinical-stage biopharmaceutical company focusing on developing and commercializing new chemical entities designed to alleviate pain by selectively targeting kappa opioid receptors. Formed in 2004, Cara has about 11 employees.
Underwriters plan to offer 5 million shares of Cara Therapeutics at $11 to $13 each to raise $60 million. The deal is expected to be priced on Thursday evening to trade Friday morning on The NASDAQ Global Market. The joint-lead managers are: Stifel and Piper Jaffray. The co-managers are: Canaccord Genuity, Needham and Janney Montgomery Scott.
Required reading
Prospectus: (1) “Certain of our existing principal stockholders and their affiliated entities have indicated an interest in purchasing an aggregate of up to approximately $8.0 million in shares of our common stock in this offering at the initial public offering price.” (Cover Page); (2) “We have entered into collaboration agreements for both I.V. and Oral CR845 with Maruishi Pharmaceuticals in Japan and Chong Kun Dang Pharmaceutical Corp. in South Korea, which provide them the exclusive right to develop and market CR845 for certain indications within those territories. As of September 30, 2013, we had received approximately $24 million in payments in connection with these collaborations and were eligible to receive further payments and royalties upon the achievement of future development and commercialization milestones.” (Page 75); and (3) “Cara reported total revenues for the nine months ended Sept. 30, 2013, of $11 million.” (Page 54)
Dicerna Pharmaceuticals is a Watertown, Massachusetts-based biopharmaceutical company focusing on the discovery and development of innovative treatments for rare inherited diseases involving the liver and cancers that are genetically defined. Formed in 2006, Dicerna Pharmaceuticals has about 24 employees.
Underwriters plan to offer 5 million shares of Dicerna Pharmaceuticals at $11 to $13 each to raise $60 million. The deal is expected to be priced during the week of Jan. 27 to trade on The NASDAQ Global Market. The joint-lead managers are: Jefferies, Leerink Swann and Stifel. The co-manager is: Baird.
Required reading
Prospectus: (1) “Certain of our existing stockholders, including certain affiliates of our directors, have indicated an interest in purchasing approximately $35.0 million of shares of our common stock in this offering at the initial public offering price.” (Cover Page); (2) “We have partnered two of our oncology development programs with the global pharmaceutical company Kyowa Hakko Kirin Co., Ltd. (KHK).” (Page 1) and (3) “Under the research collaboration and license agreement with KHK, KHK has paid us a total of $17.5 million as of September 30, 2013.” (Page 10)
Ultragenyx Pharmaceutical is a Novato, California-based development-stage biopharmaceutical company focusing on the identification, acquisition, development, and commercialization of novel products for the treatment of rare and ultra-rare diseases, with an initial focus on serious debilitating metabolic genetic diseases. Formed in 2010, Ultragenyx has about 46 employees.
Underwriters plan to offer 4.8 million shares of Ultragenyx at $14 to $17 each to raise $68 million. The deal is expected to be priced on Thursday evening to trade Friday morning on The NASDAQ Global Market. The joint-lead managers are: J.P. Morgan and Morgan Stanley. The co-managers are: Cowen and Canaccord Genuity.
Required reading
Prospectus: “In August 2013, we formed a collaboration with Kyowa Hakko Kirin Co., Ltd., or KHK, to jointly develop and commercialize KRN23 for the treatment of XLH. KHK has conducted one Phase 1, one Phase 1/2 study and one Phase 1/2 extension study of KRN23 in adults with XLH.” (Page 2)
Mountains, Boats and the Beach
The balance of this week’s calendar is non-bio. It
rounds out with Intrawest Resorts Holdings (SNOW – proposed), a Denver, Colorado-based mountain resort and adventure company; Malibu Boats (MBUU – proposed), a Loudon, Tennessee-based manufacturer of performance sport boats, and The New Home Company (NWHM- proposed), an Aliso Viejo, California-based homebuilder servicing select metropolitan areas in California, including coastal Southern California, the San Francisco Bay area and metro Sacramento.
All of the above non-bio IPOs are expected to be priced Thursday evening to trade on Friday morning.
Looking into next week, the calendar has 10 IPOs. They are expected to raise over $832 million. But more names could pop onto the calendar by the time that Monday, Feb. 3, rolls around.
Stay tuned.
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.