U.S. IPO Weekly Recap: Despite Sell-Off, 4 IPOs Price With Unicorn Anaplan Up 43%

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Includes: ALLO, DDMXU, EQ, HOTH, LTHM, OSMT, PARK, PLAN, TME
by: Renaissance Capital IPO Research

The markets roiled and recent IPOs took a nosedive, but four deals managed to raise $1.0 billion this week. Software unicorn Anaplan (NYSE:PLAN) and cancer biotech Allogene (NASDAQ:ALLO) popped over 40%. Two others ended at or below issue. One small SPAC priced.

Anaplan priced $2 above the range and popped on Friday, fortunately coming public the day that markets began to rebound. Its offering was a good barometer for the IPO market, since Anaplan fits the profile of many potential tech IPOs - posting roughly 30% growth with highly negative operating margins and cash flow.

Allogene raised $324 million, the largest offering from a biotech in over 10 years. Even with its relatively early stage and $2.2 billion IPO valuation, investors appear interested in novel moonshot therapies, and Allogene's experienced management team can boast some very promising Phase 1 results.

Livent (NYSE:LTHM), the week's largest IPO, raised $340 million in its spin-off from chemical giant FMC. The company priced down and traded down. It likely would have been a hot IPO last year. Since then, lithium forecasts have have switched from shortage to surplus, as more producers ramp up production to meet the demands of electric vehicle makers.

Equillium (NASDAQ:EQ) raised $65 million by pricing at the low end and traded up 1%. With no VC backers and an in-licensed candidate from an Indian pharmaceutical, the recently-formed biotech had an unusual story. When just 37% of 2018 biotechs are trading above issue, unusual stories get passed on.

Only Osmotica Pharmaceuticals (NASDAQ:OSMT) failed to go public; the drug developer is now attempting to price on a day-to-day basis. In addition, news broke that Tencent Music (NYSE:TME) has delayed plans to launch its potential $2 billion IPO; the deal is now tentatively targeting November.

5 IPOs During the Week of October 8th, 2018

Issuer
Business

Deal
Size

Market Cap
at IPO

Price vs.
Midpoint

First Day
Return

Return
at 10/12

Allogene Therapeutics

$324M

$2,188M

6%

+39%

+49%

Phase 1 biotech developing off-the-shelf CAR T cell cancer therapies.

Anaplan

$264M

$2,458M

21%

+43%

+43%

Provides cloud-based enterprise software for financial and operations planning.

DD3 Acquisition (NASDAQ:DDMXU)

$50M

$65M

0%

+0%

+0%

Blank check company formed to acquire a business in Mexico.

Equillium

$65M

$235M

-7%

+0%

+0%

Biotech developing therapies for graft-versus-host-disease and severe asthma.

Livent

$340M

$2,453M

-11%

+0%

-4%

Lithium compound producer being spun out of FMC.

2 Filings During the Week of October 8th, 2018

Issuer
Business

Deal
Size

Sector

Lead
Underwriter

Hoth Therapeutics (NASDAQ:HOTH)

$11M

Health Care

Benchmark

Developing topical treatments for eczema.

The Parking REIT (PARK)

$100M

Real Estate

REIT focused on parking facilities across the US.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 2.5% year-to-date, while the S&P 500 is up 5.1%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (NYSE:SPOT) and Athene (NYSE:ATH). The Renaissance International IPO Index is down 13.7% year-to-date, while the ACWX is down 8.9%. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Samsung BioLogics and innogy.