While markets ended the week on a sour note due to the UK referendum vote, the IPO market received a very positive data point this week with Twilio (NYSE:TWLO) pricing above the range and trading up 92% on its debut. The week also saw the delay of at-home compression device maker Tactile Systems Technology (NASDAQ:TCMD) and cholesterol biotech Gemphire Therapeutics (NASDAQ:GEMP); both are now looking to price next week.
|IPO Pricings Week of June 20, 2016|
| Issuer |
|Deal Size |
|Market Cap |
|Price vs. |
|First day |
|Provides APIs that enable developers to embed voice, messaging and video.|
|Selecta Biosciences (NASDAQ:SELB)||$70||$267||-6.7%||0.0%||0.0%|
|Developing nanoparticles that modulate the immune system to enhance biologics.|
Twilio - The San Francisco-based venture-backed company represented the first Silicon Valley unicorn IPO of 2016, the first 2016 IPO to price above the range and the biggest first-day pop for a tech IPO in over 2 years. Twilio is the clear leader in its fast-growing, albeit nascent, market and is poised for continued strong growth as its customers expand thanks to its usage-based revenue model. While it came to market with a strong fundamental profile, investors should take note of the low barriers to entry, unclear switching costs and lack of visibility into revenue from top customer WhatsApp (15% of MRQ sales).
Selecta Biosciences - Selecta had originally planned to raise $64 million by offering 4.25 million shares at $14 to $16, but ended up raising $70 million by offering 5 million shares at $14. It is developing a synthetic vaccine particle (SVP) that may have broad applicability to improve biologic and genetic therapies and modulate the immune system. Lead candidate SEL-212 for refractory gout is completing a small Phase 1b trial.
IPO Pipeline update
Both Tactile Systems Technology and Gemphire Therapeutics delayed their IPOs to next week. Gene expression therapy biotech Syros Pharmaceuticals (NASDAQ:SYRS) set terms to raise $60 million. There were four new IPO filings this week: golf equipment manufacturer Achushnet Holdings (GOLF-OLD) filed to raise an estimated $300 million; oil and gas E&P Centennial Resource Development (NASDAQ:CDEV) filed to raise $100 million, representing first E&P filing since 2014; LBO'd CRO Medpace Holdings (MDEP) filed to raise $150 million; and consumer SPAC Conyers Park Acquisition (CPAAU), led by former Gillette and Hershey CEOs, filed and set terms to raise $350 million. Coal MLP Armstrong Resource Partners (ARPS) withdrew its IPO filing, originally filed in October 2011.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 10% year-to-date, while the S&P 500 is flat. 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 3.2% year-to-date (as of Thursday's close), compared to +2.4% (also as of Thursday) for ACWX. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include NN Group and Aena S.A.