The biotechnology/biopharmaceutical IPOs (bio-IPOs) have dominated this year’s calendar. To date, 14 of 2014’s 26 IPOs came from the bio-IPO sector, according to the U.S. Securities and Exchange Commission filings. Their scorecard showed eight winners, four losers and two unchanged as of the market’s close on Friday, Feb. 7. Thanks to a few breakaway winners, the average gain was 31.8 percent. But the median return, halfway between the best and the worst, showed that their aftermarket performance was a more sobering gain of 3.96 percent.
Last week’s calendar produced 12 initial public offerings. Eight were bio-IPOs. By Friday’s close, the sector was clearly struggling – three up, three down and two unchanged. The median return was zero percent.
Crossing the Rubicon
But there was more to last week than a heavy bio-IPO calendar.
The financial press reported lightning on the IPO horizon last week. A couple of exotic technology companies were planning on going public. Said to have filed confidential plans with the SEC were: GoPro, a San Mateo, California-based brand of high-definition personal cameras used in extreme action video photography, and PubMatic, a Redwood City, California-based online advertising company.
And the SEC got into the act as well.
The Rubicon Project (RUBI – proposed) filed plans for an IPO to raise $100 million. Rubicon is a Los Angeles-based company offering its “Advertising Automation Cloud” software platform. Its technology drives a leading marketplace for the real-time trading of digital advertising between buyers and sellers.
A Healthy Calendar
This week’s calendar has 11 deals: Five are bio-IPOs; one of them is a carry-over. Nevertheless, there could be some spice left in the sector. Among the early favorites are: Concert Pharmaceuticals (CNCE – proposed) – yes a bio-IPO – and Inogen (INGN – proposed).
Concert Pharmaceuticals is a Lexington, Massachusetts-based clinical-stage biopharmaceutical company applying its knowledge of deuterium chemistry to discover and develop novel small- molecule drugs. The company’s product pipeline includes drugs for diabetic kidney disease and treatments for involuntary spasticity and pain in people with multiple sclerosis and other diseases. Formed in 2006, Concert Pharmaceuticals has about 43 employees.
Underwriters plan to offer 5 million shares of at $12 to $14 each to raise $65 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: UBS Investment Bank and Wells Fargo Securities. The co-managers are: JMP Securities and Roth Capital Partners.
Prospectus: (1) “Certain of our existing principal stockholders and their affiliated entities, as well as Celgene, one of our collaborators, have indicated an interest in purchasing an aggregate of up to $14.0 million of shares of common stock in this offering at the initial public offering price.” (Cover Page); (2) Among Concert’s collaborators are: Avanir, Celgene and Jazz Pharmaceuticals. (Page 2) and for the nine months ended Sept. 30, 2013, Concert reported a net loss of $141,000 on total revenues of $24 million versus a net loss of $12.7 million on total revenues of $12.6 million for the same period a year ago. (Page 63)
Note: Concert has the magic that belonged to other bio-IPOs that scored opening-day pops recently. Those magic ingredients are: insiders buying into the offering, collaborations and revenues.
O2 to Go
Inogen is a Goleta, California-based medical technology company that provides portable oxygen concentrators used to deliver supplemental long-term oxygen therapy to patients suffering from chronic respiratory conditions. Formed in 2001, Inogen has about 354 employees.
Underwriters plan to offer 4.4 million shares of at $16 to $18 each to raise $45 million. The deal is expected to be priced on Thursday evening to trade Friday morning on The NASDAQ Global Market. The lead manager is: J. P Morgan. The co-managers are: Leerink Swann, William Blair and Stifel.
Prospectus: For the nine months ended Sept. 30, 2013, Inogen reported a net income of $3.5 million on total revenues of $55.7 million versus a net income of $456,000 on total revenues of $34.7 million for the same period a year ago. (Page 55)
Looking into next week, the calendar has one IPO. But more names could pop onto the IPO launching pad by the time that Monday, Feb. 17, rolls around.
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.