Three IPOs raised a combined $426 million this week, all pricing below the midpoint and finishing below issue. On average, they returned a disappointing -13.5%.
Despite lopping $1 billion off of its proposed valuation, Germany-based BioNTech (NASDAQ:BNTX) became the third-largest biotech IPO by market cap in at least 10 years. The mRNA developer raised $150 million at a market cap of $3.4 billion, 23% below its original target, and below its last round in August on a per-share basis. Investors likely valued it against close peer Moderna (NASDAQ:MRNA), which declined 20% from the time BioNTech launched its roadshow until it priced. It finished the week down 8%. BioNTech had raised $1.3 billion privately, with the vast potential of mRNA generating excitement among scientists and VCs, but recent underperformance has made public equity markets skeptical about any $3+ billion company with no product revenue.
It was joined by Vir Biotechnology (NASDAQ:VIR), which raised $143 million at a market cap of $2.3 billion, also one of the largest biotechs of the past decade. Vir priced at the $20 low end, still above its January round ($18), and traded down 30% in one of the worst first-day drops of 2019. Backed by ARCH Venture and SoftBank, it had raised over $600 million privately, and is led by the former CEO of Biogen. Its RNA interference platform is being tested in a Phase 2 trial for hepatitis B.
HBT Financial (NASDAQ:HBT) priced below the range to raise $133 million, the largest US bank IPO in more than two years. It priced at a market cap of $421 million, in line with peers on price-to-book, and traded down 3% on its debut. All six of the year’s regional US bank IPOs now trade roughly at or below the offer price, with an average return of -4%.
Family-owned bank with 64 branches in central and northeastern Illinois.
German biotech developing individualized immunotherapies for cancer.
Phase 2 biotech developing immunologic therapies for infectious diseases.
More Chinese issuers submitted initial filings this week, joined by a biotech, a genetic diagnostics company, and fours SPACs.
Phase 1 biotech developing therapies for NASH and other metabolic diseases.
Provides genetic testing and rare disease diagnostic products.
FinServ Acquisition (FSRVU)
Blank check company targeting the fintech industry led by finance veterans.
Osprey Technology Acq. (SFTW.U)
Second blank check company led by Edward and Jonathan Cohen targeting the tech industry.
Merida Merger I (MCMJU)
Blank check company formed by Merida Capital Partners targeting the cannabis industry.
Fangdd Network Group (DUO)
Chinese online real estate trading platform.
LGL Systems Acquisition (DFNSU)
Blank check company led by Marc Gabelli and the co-founder of L3 Technologies targeting the defense industry.
Q&K International Group (QK)
Operates a long-term apartment rental platform in China.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 10/10/19, the Renaissance IPO Index was up 21.8% year-to-date, while the S&P 500 had a gain of 19.1%. Renaissance Capital’s IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (NYSE:SPOT) and VICI Properties (OTC:VICI). The Renaissance International IPO Index was up 15.5% year-to-date, while the ACWX was up 10.8%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.