Three companies raised $639 million last week which ties the prior week as the year's most active by deal count. Even though all three companies pay dividends, and the IPO market is picking up steam, all three IPOs ended their first days down or flat, bringing the number of first-day flops up to 12 of 16 (75%). An active IPO market lives and dies on investors' comfort with taking on the risk of a new issue.
Las Vegas casino operator Red Rock Resorts (RRR ) raised $531 million in the second-largest IPO of 2016, while Chinese online broker Yintech Investment (YIN ) took in $101 million. Lastly, water utility Global Water Resources (GWRS ) raised just $7 million. As you can see, the active IPO sectors are beginning to broaden beyond health care, with the year's first offerings from consumer and utilities companies. This week, however, biotechs are back in the spotlight with four deals up for grabs.
Intellia Therapeutics (NTLA ) will look to raise $85 million in a separate private placement from collaboration partners Regeneron Pharmaceuticals (REGN ) and Novartis (NVTS ). Intellia will look to sell 5 million shares at a range of $16-18. Its closest competitor, Editas Medicine (EDIT ), went public earlier this year and has returned 107% since the IPO. Insiders have indicated they will be on hand for 35% of the deal.
Oncobiologics (ONS ) is a biotech company that expects to begin Phase 3 trials on its Humira and Avastin biosimilars in 2016. These two drugs combined for nearly $20 billion in sales in 2014 and are projected to grow to over $22 billion by 2020. The company hopes to raise $60 million by selling 5 million shares in the $11-13 range. Insiders have committed to 33% of the deal.
Cancer Prevention Pharmaceuticals (CPP ) is a micro-cap biotech that, according to its filings is looking to raise $25 million to fund the completion of its Phase 3 trial for its lead candidate. It originally filed terms in early February to sell 1,923,076 shares at a range of $12-14. Insiders are on hand to support as much as 20% of the deal.
Lastly, Spring Bank Pharmaceuticals (SBPH ) which postponed its original deal in mid-March, was set to raise $40 million. It has since changed underwriters, decreased the deal size by over 60% and increased its insider buying to 53% from 25%. The company is set to try again and is now looking for $15 million by selling up to 1,154,000 shares at a range of $12-14. This is the weeks smallest deal.