U.S. IPO Weekly Recap: 2019 Kicks Off With IPO Filings

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Includes: ALEC, ANCN, CSTX, KLDO, XTF
by: Renaissance Capital IPO Research
Summary

As expected, no IPOs priced this past week. And thanks to the government shutdown, no IPOs launched roadshows, either.

Based on recent filings, we expect the first IPOs of 2019 to be biotechs and Chinese companies, continuing last year's trend.

Alector was the week's big biotech filing, aiming to raise $150 million.

As expected, no IPOs priced this past week. And thanks to the government shutdown, no IPOs launched roadshows, either. However, new IPOs entered the public pipeline, with initial filings from biotechs Alector (ALEC) and Anchiano Therapeutics (ANCN), Blackstone subprime lender Exeter Finance (XTF), and large SPAC Acamar Partners Acquisition (ACAMU). Based on recent filings, we expect the first IPOs of 2019 to be biotechs and Chinese companies, continuing last year's trend.

While IPOs underperformed in 4Q18, they started to rebound this past week. The Renaissance IPO Index is up 8.8% since the start of the year, compared to 3.7% for the S&P 500. For the first time in over a month, the VIX Volatility Index fell below 20. More weeks like this could quickly re-open the IPO window.

Alector was the week's big biotech filing, aiming to raise $150 million. Backed by Polaris and OrbiMed, the company has over $300 million in cash, and is reportedly targeting a $1+ billion valuation. It uses a novel approach to target neurodegeneration, and is in Phase 1 trials for a form of dementia and Alzheimer's.

Exeter Finance, which filed to raise $100 million, is also notable. Blackstone bought the subprime auto lender in 2011, and in the 9mo18, it posted strong revenue and earnings growth.

7 Filings During the Week of January 7th, 2019

Issuer
Business

Deal
Size

Sector

Lead
Underwriter

Cirius Therapeutics (CSTX)

$86M

Health Care

Citi

Developing therapies for the treatment of liver and metabolic diseases.

HeZhong International (HZ)

$6M

Technology

ViewTrade

Operates a peer-to-peer lending marketplace in China.

Kaleido Biosciences (KLDO)

$100M

Health Care

Goldman

Phase 2 biotech developing microbiome therapies to treat rare genetic disorders.

Acamar Partners Acq.

$300M

SPAC

Goldman

Blank check company led by the Executive Chairman of travel retailer Dufry.

Exeter Finance

$100M

Financials

Citi

Full-service subprime auto lender backed by Blackstone.

Alector

$150M

Health Care

Morgan Stanley

Phase 1 biotech developing therapies for neurodegeneration.

Anchiano Therapeutics

$35M

Health Care

Oppenheimer

Phase 3 biotech developing therapies for early-stage bladder cancer.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 1/10/19, the Renaissance IPO Index was up 8.8% year-to-date, while the S&P 500 had a gain of 3.7%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include VICI Properties (OTC:VICI) and Spotify (NYSE:SPOT). The Renaissance International IPO Index was up 2.9% year-to-date, while the ACWX was up 4.1%. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include SoftBank and China Tower.

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors