There are only two deals waiting to make their debuts. Each has a unique story. The offerings are Epizyme (EPZM – proposed), a biopharmaceutical company, and Kamada Ltd. (KMDA – proposed), a foreign company.
Reading the Dollar Signs
If a biopharmaceutical/biotechnology company has collaboration and licensing revenues, its IPO might pop in the aftermarket. That’s a sign. Let’s take a look at a recent few:
- Chimerix (CMRX) is a Durham, North Carolina-based biopharmaceutical company. It reported collaboration, licensing, contract and grant revenues of $33.7 million for the year ended Dec. 31, 2012. It priced its IPO of 7.3 million shares at $14 each on April 10. The stock closed on Friday, May 24, at $21.81 – UP 55.8 percent from its initial offering price.
- Enanta Pharmaceuticals (ENTA) is a Watertown, Massachusetts-based biotechnology company. It reported revenues from collaborative research and license agreements of $68.8 million for the 12 months ended March 31, 2013. It priced its IPO of 4 million shares at $14 each on March 20. The stock closed on Friday, May 24, at $20 – UP 42.9 percent from its initial offering price.
- Portola Pharmaceuticals (PTLA) is a South San Francisco-based biopharmaceutical company. It reported collaboration and license revenues of $72.7 million for the 12 months ended March 31, 2013. It priced its IPO of 8.4 million shares at $14.50 each on May 21. The stock closed on Friday, May 24, at $16.10 – UP 11 percent from its initial offering price.
Now let’s look at this week’s biopharmaceutical IPO:
Epizyme plans to price 4.29 million shares at $13 to $15 each on Thursday evening. The IPO is expected to start trading on Friday morning on the NASDAQ Global Market under the proposed symbol “EPZM.” The joint-lead managers are Citigroup, Cowen and Leerink Swann. The co-managers are JMP Securities and Wedbush PacGrow Life Sciences.
Based in Cambridge, Massachusetts, Epizyme is a clinical- stage biopharmaceutical company that discovers, develops and plans to commercialize innovative personalized therapeutics for patients with genetically defined cancers. The company was formed in 2007. It has about 67 employees.
Epizyme plans to sell all of the shares in the offering. It expects to have about 26.8 million shares outstanding after the offering.
From The Mountain Man’s IPO Guide:
Epizyme reported collaboration revenues of $48.5 million for the 12 months ended March 31, 2013.
Reading the Cover
From time to time, a company files for an “initial public offering” in the U.S. capital markets. But on closer examination, it might be just a “public offering.” These “IPOs” usually do not produce moonshots in the aftermarket.
A sign: Look on the front page of a company’s preliminary prospectus. It will tell you all you need to know. Let’s look at a few recent deals that were presented as IPOs:
- GW Pharmaceuticals Plc. (GWPH) is a Wiltshire, United Kingdom-based biopharmaceutical company. It priced 3.5 million American Depositary Shares (ADSs) at $8.90 each on May 1, 2013. It was billed by others as an IPO, but the cover page of its preliminary prospectus stated: “Prior to the offering, there has been no public market for the ADSs. We have applied to list the ADSs on the Nasdaq Global Market under the symbol “GWPH.” Our ordinary shares are listed on the Alternative Investment Market of the London Stock Exchange Plc., or the AIM, under the listing code “GWP.” On April 17, 2013, the last reported sale price of the shares on the AIM was £0.5900 per share, equivalent to US$10.79 per ADS.” Its “IPO” closed on Friday, May 24, at $8.89 – DOWN 1 cent from its offering price.
- Trade Street Residential (TSRE) is an Aventura, Florida-based real estate investment trust, or REIT. It priced 6.3 million shares at $10 each on May 13, 2013. Some billed the offering as an IPO, but the cover page of its preliminary prospectus stated: “We expect the public offering price to be between $11.00 and $13.00 per share. Our common stock currently trades on the OTC Pink Market under the symbol “TSRE.” On April 8, 2013, the most recent day on which our common stock traded on the OTC Pink Market, the closing price of our common stock was $16.00 per share.” Its “IPO” closed on Friday at $9.62 – DOWN 38 cents from its offering price.
- UBIC (UBIC) is a Tokyo-based provider of Asian-language eDiscovery solutions and services. It priced 1.1 million ADSs at $8 each on May 15, 2013. The cover page of its preliminary prospectus stated: “Our common stock currently is listed on the Mothers Marketplace of the Tokyo Stock Exchange under stock code number 2158. On May 2, 2013, the last reported sale price of our common stock on the Tokyo Stock Exchange was ¥4,460 per share (which was equivalent to $9.11 per ADS based on the exchange rate on such date).” Its “IPO” closed on Friday at $8 – UNCHANGED from its offering price.
From Israel With Love
Kamada, based in Israel, is a pharmaceutical company that is developing treatments for juvenile diabetes, cystic fibrosis and congenital emphysema. It expects to offer 5.6 million ordinary shares at a price to be determined. The offering is expected to be priced on Thursday evening to trade Friday morning on the Nasdaq Global Market under the proposed symbol “KMDA.”
From The Mountain Man’s IPO Guide:
Let’s turn to Kamada’s preliminary prospectus: “Our ordinary shares are listed on the Tel Aviv Stock Exchange (the “TASE”) under the symbol “KMDA.” On May 12, 2013, the last reported sale price of our ordinary shares on the TASE was NIS 38.24, or $10.75, per share (based on the exchange rate reported by the Bank of Israel on such date, which was NIS 3.5580 per U.S. $1.00).” So the cover tells the story. Kamada shares are already traded in Tel Aviv.
And there you have it: The Mountain Man’s Guide Book to this week’s IPO market.
This brings us to next week. At press time, there were only two deals on the IPO calendar for the week of June 3, 2013. The calendar, though, has been known to 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.