The IPO Buzz: Required Reading

Two of this week’s nine IPOs have attracted some investors’ interest. One company is a spinoff providing a platform to streamline cloud software development and the other is developing next-generation cancer therapies to boost patients’ immune systems. All you need to know can be found in their prospectuses. For that matter, if you read the prospectus for each of the rest of this week’s IPOs, you will find some worthwhile tidbits.

For the record, this week’s IPO calendar has nine companies looking to raise about $2.7 billion. Read the prospectuses. You might find something noteworthy.

Cloud Software and Cancer Drugs

The two deals that appear to be in play are Pivotal Software (PVTL proposed) and Surface Oncology (SURF proposed).

Pivotal Software is based in San Francisco. From the prospectus: The company is a spinoff of Dell Technologies. After the IPO, Dell will own 70.1 percent of the total outstanding shares of common stock, or 95.9 percent of the combined voting power of the combined outstanding stock.

Pivotal provides a cloud-native platform, Pivotal Cloud Foundry, which “makes software development and IT operations a strategic advantage for its customers.” The platform “accelerates and streamlines software development,” Pivotal says. The upshot: Its customers’ development and IT operations teams can spend more time writing code and waste less time on mundane tasks. Pivotal’s software platform is designed for large companies. Its customers include American Airlines, Bloomberg, Citi, Dell, ExpressScripts, Ford and Liberty Mutual, the prospectus says.

(For more information about the above company and others on the IPO calendar, please check the profiles found on’s website.)

Surface Oncology is based in Cambridge, Massachusetts. From the prospectus: Insiders are in for $25 million of the $84 million being offered. Novartis Institutes for Biomedical Research has agreed to buy $11.5 million worth of stock in a private placement. And Novartis is a collaborator. Surface has received an upfront payment of $70.0 million from Novartis and is currently entitled to potential option purchase, option exercise and milestone payments upon the achievement of specified development and sales milestones, which could amount to $1.17 billion.

Surface is a clinical-stage immuno-oncology company focused on using its specialized knowledge of the biological pathways critical to the immunosuppressive tumor microenvironment to develop next-generation cancer therapies.

Other IPOs Worth Mentioning

GrafTech International (EFA proposed) is based in Brooklyn Heights, Ohio. From the prospectus: BCP IV GrafTech Holdings, an insider, is offering all of the 37.8 million shares of the IPO.

GrafTech produces graphite electrode products essential to the production of EAF (electronic arc furnace) steel and other ferrous and non-ferrous metals.

Vrio (VRIO proposed) is based in Dallas. From the prospectus: All of the IPO’s proceeds will go to repay debt to AT&T, Vrio’s parent company.

Vrio provides digital entertainment services in South America. The company has about 13.6 million subscribers in the Region, consisting of eight countries in South America and three countries in the Caribbean. The company is one of the two largest pay-TV providers in each country in which it operates, with the exception of Chile and Peru.

Three Non-IPO IPOs

FirstCaribbean International Bank (FCI proposed) is based in Saint Michael, Barbados. From the prospectus: The bank’s shares are traded on the Barbados Stock Exchange, the Trinidad and Tobago Stock Exchange Limited and the International Securities Market of the Barbados Stock Exchange. This is a foreign-traded stock making its debut in the U.S. capital markets. It is actually a public offering. Investors can buy the underlying shares on foreign exchanges before their U.S. pricing dates.

FirstCaribbean operates 62 branches located primarily in the Bahamas, Barbados and the Cayman Islands with about 20 percent market share of loans and deposits in these markets.

Mereo BioPharma Group (MRE0 proposed) is based in London. From the prospectus: The company’s shares are traded on AIM, a market of the London Stock Exchange, under the symbol “MPH.”

Mereo BioPharma is focused on in-licensing mid-stage rare disease drug candidates from large pharmaceutical companies. Its lead candidate is in a Phase 2b trial for adults with brittle bone disease and is expected to begin a Phase 2b/3 trial for children.
MorphoSys AG (MOR proposed) is based in Planegg, Germany. From the prospectus: The company’s stock is traded on the Frankfurt Stock Exchange.

MorphoSys is licensing antibodies to pharmaceutical companies and developing its own therapy for lymphoma.

A Small-Cap Bank IPO

Level One Bancorp (LEVL proposed) is based in Farmington Hills, Michigan. From the prospectus: The bank holding company is offering 1 million shares at $27 to $29 each to raise $28 million.

Level One Bank, the company’s flagship bank, has 14 offices, including 10 banking centers in Oakland County, which has the 12th-highest median income in the United States, among counties with over 1 million residents. The company has a banking center in downtown Detroit and a banking center in Grand Rapids. Level One also has one banking center in Sterling Heights and one mortgage loan-production office in Ann Arbor.

A Carryover from Last Week

Alzheon (ALZH proposed) is based in Framingham, Massachusetts. Not in the prospectus: The company has no insiders buying into the IPO, no collaborators and no revenue. The deal was to have been priced last week, but it was moved to a day-to-day basis. 

Alzheon is a clinical-stage biopharmaceutical company with a Phase 3-ready program to treat Alzheimer’s disease and a discovery platform of small molecules to inhibit protein misfolding in neurodegenerative disorders.

Next Week: Just One

For the week of April 23, 2018, the IPO calendar has just one initial public offering. It is a global HCM (human capital management) software company. The deal is expected to raise $420 million. Nevertheless, anything can happen when the SEC’s filing window opens again for business on Monday morning.

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.