U.S. IPO Week Ahead: Medpace And 3 Others Are On Pace For IPOs

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Includes: AIRG, MEDP, MTFB, PTGX
by: Renaissance Capital IPO Research

Four companies are set to raise a combined $270 million in the week ahead. Most notable deal Medpace, a contract research organization focused on biotechs, is joined by two potential customers: Protagonist Therapeutics and Motif Bio. Thanks to insider support, biotechs are the most active segment of the 2016 IPO market, with 20 offerings year-to-date (36% of total), but their average return (-2%) far underperforms the year's non-biotechs (+26%). This may be the last week of significant activity before the yearly summer slowdown, with activity likely picking up again after Labor Day.

Medpace Holdings (Pending:MEDP) is a global full-service CRO focused on small and mid-sized biopharmas. Set to raise $151 million on a market cap of $863 million, its industry-leading EBITDA margins and strong free cash flow generation is a potential draw for investors. By focusing on the faster-growing portion of the $23 billion Phase I-IV CRO market, Medpace has been able to grow revenue at a 22% CAGR from 2012-2015. CRO peer inVentiv withdrew its IPO plans early in the month after receiving a significant equity investment. Overall, Medpace's peers have been doing well, with both PRA Health Sciences (NASDAQ:PRAH) and INC Research (NASDAQ:INCR) trading up well over 100% since their respective 2014 IPOs.

Protagonist Therapeutics (Pending:PTGX) is slated to raise $70 million at a market cap of $190 million. Focusing on ulcerative colitis and Crohn's disease, the biotech's lead candidate completed Phase 1 trials and is scheduled to enter Phase 2b trials in the 4Q16. A second candidate is expected to begin Phase 1 trials in 2017. Though its administration (oral as opposed to injectable) is novel, the drug would enter a crowded field led by AbbVie's (NYSE:ABBV) blockbuster Humira.

Motif Bio (Pending:MTFB) is a late stage biotech focused on antibiotics for multi-drug resistant bacteria. The company, which is currently listed on London's AIM market, hopes to raise $35 million at a market cap of $110 million. Lead candidate, Iclaprim, which previously failed to receive FDA approval, was acquired in 2015 and is currently in two Phase 3 trials.

Airgain (NASDAQ:AIRG), which supplies embedded antenna components to enable wireless networking in electronic devices, is set to raise $14 million at a market cap of $78 million. The company hopes to cash in on the growing IoT industry as it battles falling ASPs.

Renaissance Capital's IPO Calendar - Week of 8/8/2016

Issuer
Business

Symbol
Exchange

Deal Size
$mil

Price Range
Shares Filed

Lead Manager(s)

Medpace Holdings
Cincinnati, OH

MEDP
Nasdaq

$151

$20 - $23
7,000,000

Jefferies
Credit Suisse

Global CRO focused on small and mid-sized biopharmaceuticals.

Protagonist Therapeutics
Milpitas, CA

PTGX
Nasdaq

$70

$11 - $13
5,835,000

Leerink Partners
Barclays

Developing peptide-based oral drugs for inflammatory bowel disease.

Motif Bio
New York, NY

MTFB
Nasdaq

$35

$12.42
2,800,000

SunTrust Robinson Humphrey
Ladenburg Thalmann & Co.

Late-stage biotech developing antibiotics for multi-drug resistant bacteria.

Airgain
San Diego, CA

AIRG
Nasdaq

$14

$9 - $10
1,500,000

Northland Securities
Wunderlich Securities

Supplies embedded antennas for Wi-Fi routers and other electronic devices.

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IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 3% year-to-date, while the S&P 500 is up 7%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (NYSE:BABA), Synchrony Financial (NYSE:SYF) and Citizens Financial Group (NYSE:CFG). The Renaissance International IPO Index is down 4% year-to-date, compared to +4% for ACWX. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include NN Group and Aena S.A.