U.S. IPOs Lag in 2016, With Lowest Numbers in Years

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By Che Odom

Feb. 11 — Just four companies have gone public on U.S. exchanges as of Feb. 11, one of the slowest starts for initial public offerings in several years, according to Bloomberg Law: Corporate Transactions data.

Two companies went public Feb. 11 — Proteostasis Therapeutics Inc. of Cambridge, Mass., and AveXis Inc., based in Bannockburn, Ill.

New rulemaking out of the Securities and Exchange Commission, alternative methods of financing and market volatility may be behind the low numbers.

While more than 30 companies have announced their intent to go public since Jan. 1, four biotech companies are the only issuers to complete the process and publicly trade in 2016.

BeiGene Ltd., based in China, and Editas Medicine Inc. of Cambridge, Mass., began trading Feb. 2.

No IPOs priced in January. That's the slowest month for IPOs since December 2008, according to a review of the data.

In contrast, in January 2015, 19 issuers began trading stock for the first time on U.S. exchanges.

Pricing Disconnect

James Moloney, a partner in the Irvine, Calif., office of Gibson, Dunn & Crutcher LLP, whose practice focuses on corporate governance and transactional and securities law, told Bloomberg BNA in an interview Feb. 11 that he is not that surprised or concerned about the slow start.

Some companies that were successful in completing their IPOs last year weren't able to maintain their stock prices above the initial offering price for an extended period of time, Moloney said.

While sellers are looking for strong pricing, “price savvy investors” may be looking for “bargains” or for “issuers who can solidly maintain trading pricings that are a healthy margin above the IPO price for more than a year,” he said.

‘Historically' Slow Months

Given that the market may be experiencing a slight disconnect in pricing, some issuers are pursuing interim capital-raising in the private markets, Moloney said.

“I would also note that historically, January and February are relatively slow months for IPOs, with most typically emerging during the summer and early months of fall,” he said.

SEC Rulemaking

New rules at the SEC may be dampening the thirst for IPOs, Moloney continued. These include the lifting of the ban on general solicitation and advertising for certain private securities offerings pursuant to the Jumpstart Our Business Startups Act and increasing the threshold for unregistered public offerings .

In addition, the ability of emerging growth companies to submit their draft registration statements on a confidential basis may be influencing IPO numbers, Moloney said.

“All of that may be masking, to a certain degree, the capital-raising activity that is already in progress,” he said.

To contact the reporter on this story: Che Odom in Washington at codom@bna.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bna.com

U.S. IPOs Announced Since Jan. 1
Issuer Date Announced Offer Size Lead Bookrunner Legal Adviser Offer Stage Offer Price
Sensus Healthcare Inc. 02/10/2016 $23.00M Joseph Gunnar & Co. Gunster Yoakley & Stewart PA Pending
US Foods Holding Corp. 02/09/2016 $100.00M Jenner & Block LLC Pending
GRCR Partners Inc. 02/08/2016 $0.25M Daniel H Luciano Esq Pending
Leng Universal Inc. 02/02/2016 $10.00M Adam S Tracy Esq Pending
Moleculin Biotech Inc. 02/01/2016 $12.00M Bonwick Capital Partners LLC Schiff Hardin LLP Pending
Plush Corp. 01/29/2016 $0.03M Mont E. Tanner Esq Pending
XG Sciences Inc. 01/27/2016 $54.28M Foster Swift Collins & Smith PC Pending
Tactile Systems Technology Inc. 01/25/2016 $86.25M Piper Jaffray & Co. Faegre Baker Daniels LLP Pending
Titan Computer Services Inc. 01/20/2016 $5.78M Feder Kaszovitz Isaacson Weber Skala & Bass Pending
KLR Energy Acquisition Corp. 01/19/2016 $130.00M Ellenoff Grossman Schole & Cyruli LLP Pending
Global Water Resources Inc. 01/19/2016 $5.92M Snell & Wilmer LLP Pending
Axeture Corp. 01/19/2016 $0.10M Law Office of Andrew Coldicutt Pending
PC Mobile Media Corp. 01/19/2016 $0.04M Law Offices of Joseph L Pittera Pending
Oncobiologics Inc. 01/15/2016 $115.00M Jefferies Cooley LLP Pending
Avexis Inc. 01/15/2016 $89.25M Goldman Sachs Cooley LLP Pending $20
Senseonics Holdings Inc. 01/15/2016 $51.75M Leerink Partners LLC Cooley LLP Pending
XTI Aircraft Co. 01/14/2016 Pending
Bosy Holdings Corp. 01/13/2016 Benjamin L Bunker Esq Pending
Clearside Biomedical Inc. 01/08/2016 $57.50M RBC Capital Markets Cooley LLP Pending
OTG EXP Inc. 01/07/2016 $585.00M Morgan Stanley Kirkland & Ellis Postponed
Visterra Inc. 01/05/2016 $69.00M Leerink Partners LLC Wilmer Cutler Pickering Hale & Dorr LLP Pending
Spring Bank Pharmaceuticals Inc. 01/05/2016 $57.50M William Blair & Co. LLC Wilmer Cutler Pickering Hale & Dorr LLP Pending
Nova Smart Solutions Inc. 01/05/2016 $6.17M Matheau JW Stout Esq. Pending
Tabula Rasa HealthCare Inc. 01/04/2016 $115.00M Wells Fargo Morgan Lewis & Bockius Pending
Corvus Pharmaceuticals Inc. 01/04/2016 $115.00M Credit Suisse Latham & Watkins LLP Pending
Editas Medicine Inc. 01/04/2016 $108.56M Morgan Stanley Wilmer Cutler Pickering Hale & Dorr LLP Trading $16
Syndax Pharmaceuticals Inc. 01/04/2016 $86.25M Morgan Stanley Hogan Lovells US LLP Pending
Audentes Therapeutics Inc. 01/04/2016 $86.25M Bank of America Merrill Lynch Fenwick & West LLP Pending
Reata Pharmaceuticals Inc. 01/04/2016 $80.00M Citi Vinson & Elkins LLP Pending
Bavarian Nordic A/S 01/04/2016 Cowen & Co. Cooley LLP, Kromann Reumert Pending
BorrowMoney.com Inc. 01/04/2016 $2.05M Pending
Source: Bloomberg Law: Corporate Transactions