Health IPOs Down 1% And Housing IPOs Trade Up After Heavy Discount

by: Renaissance Capital IPO Research

The week’s five health sector IPOs have produced lackluster returns; together they are down 1% on average from their IPO prices. Amedica (NASDAQ:AMDA), which creates improved spine, hip and joint replacements, dropped 6% today after pricing at the largest discount of the year (48% below the midpoint). Treating the pain of bad bones could prove to be more profitable than replacing them, as Flexion Therapeutics (NASDAQ:FLXN), an injectable therapeutics company, leads the health care pack with a 13% gain.

Installed Building Products (NYSE:IBP) has been the week's overall best performer so far, finishing up 16% today. The company's IPO marks the third housing-related IPO of the year after those of Continental Building Products (NYSE:CBPX) and The New Home Company (NYSE:NWHM), both of which priced at a discount only to then achieve double-digit returns. On average, the three companies priced 25% below their proposed midpoints, but are now trading 18% on average above their IPO prices.

IPO pricings (week of February 10, 2014)
Company (Ticker) Business Deal Size ($mm) IPO Price vs. Midpoint Return as of 2/13
Installed Building Products (IBP) Insulation installer $82 -27% 16%
Flexion Therapeutics (FLXN) Osteoarthritis pain therapy $65 0% 13%
Talmer Bancorp (NASDAQ:TLMR) WL Ross-backed regional bank $202 -4% 8%
Concert Pharmaceuticals (NASDAQ:CNCE) Deuterium enhanced treatments $84 8% 1%
NephroGenex (NRX) Diabetic nephropathy treatments $37 -8% -1%
Amedica (AMDA) Silicon nitride medical devices $20 -48% -6%
Eagle Pharmaceuticals (NASDAQ:EGRX) Injectable forms of generic drugs $50 -15% -12%