The IPO market produced nine IPOs over the first two weeks of August, followed by a solitary IPO over the last two weeks of the month as the market entered the customary interlude around the Labor Day holiday. Total gross proceeds for the month were $1.36 billion.
The first eight months of the year have seen a total of 116 IPOs with gross proceeds of $17.51 billion, 53 IPOs (or 31%) below the 169 IPOs over the first eight months of 2014. Gross proceeds over the first eight months of 2015 are slightly below half of the $36.22 billion total in the first eight months of 2014.
The lower level of gross proceeds in 2015 compared to 2014 is largely attributable to a reduction in the number of large IPOs. The first eight months of 2014 produced six billion-dollar IPOs with an additional dozen raising more than $500 million—with these eighteen companies raising cumulative gross proceeds of $20.47 billion. The first eight months of 2015 have yet to produce a billion-dollar
IPO and have seen only six IPOs over $500 million, which raised a combined $4.12 billion in gross proceeds.
The median IPO offering size for the first eight months of 2015, at $97.5 million, is about 2% higher than the $96.0 million median offering size for all of 2014.
The median life sciences IPO offering size over the first eight months of 2015 was $73.5 million, compared to $121.2 million for all other companies.
Emerging growth companies (EGCs) have accounted for all but seven IPOs over the first eight months of 2015, or 94% of the year’s total, compared to 85% of all IPOs in 2014. The median EGC IPO offering size over the first eight months of 2015 was $91.1 million, slightly more than one fifth of the $441.0 million median offering size for non-EGC IPO companies.
The median annual revenue of IPO companies and the percentage of profitable IPO companies have both trended down over the past four years. In 2012, IPO companies had median annual revenue of $133.6 million and 55% were profitable. The median annual revenue of IPO companies over the first eight months of 2015 was $41.3 million, less than one-third of the 2012 figure, and only 29% were profitable—the lowest such figures since the dot-com boom years.
While the average IPO over the first eight months of the year produced a first-day gain of 18%, the average August IPO produced a first-day gain of only 3% (excluding the one moonshot in August—an IPO that doubles in price on its opening day).
Seven of the top 10 best first-day gains over the first eight months of 2015 have come from life sciences companies, and life sciences companies accounted for all but three of the 15 best performances at August month-end, measured by percentage gain from offering price.
Through August 31, the average 2015 IPO was trading 7% above its offering price, with 45% trading below their offering price and 66% trading below their first-day closing price.
IPO activity in August consisted of offerings by the following companies listed in the order they came to market:
- Intec Pharma, a clinical stage biopharmaceutical company focused on developing drugs based on its proprietary Accordion Pill platform technology, an oral drug delivery system that is designed to improve the efficacy and safety of existing drugs and drugs in development by utilizing an efficient gastric retention and specific release mechanism, priced an IPO upsized by 12% and gained less than 1% in first-day trading.
- Amplify Snack Brands, a high growth, snack food company focused on developing and marketing products that appeal to consumers’ growing preference for Better-For-You snacks, priced above the range and ended its first trading day down 10%.
- Sunrun, a provider of clean, solar energy to homeowners at a significant savings to traditional utility energy, priced at the midpoint of the range and declined 23% in first day trading.
- Zynerba Pharmaceuticals, a specialty pharmaceutical company focused on developing and commercializing proprietary next-generation synthetic cannabinoid therapeutics formulated for transdermal delivery, priced at the midpoint of the range and produced a 16% first-day gain.
- Aimmune Therapeutics, a clinical-stage biopharmaceutical company advancing a new therapeutic approach, including the development of proprietary product candidates, for the treatment of peanut and other food allergies, priced an IPO upsized by 20% at the high end of the range and ended its first day of trading up 51% from its offering price.
- Planet Fitness, one of the largest and fastest-growing franchisors and operators of fitness centers in the United States by number of members and locations, priced at the high end of the range and was flat in first-day trading
- Global Blood Therapeutics, a biopharmaceutical company dedicated to discovering, developing and commercializing novel therapeutics to treat grievous blood-based disorders, priced above the range and produced a first-day gain of 116%—the fifth moonshot of the year.
- Conifer Holdings, an insurance holding company offering insurance coverage in both specialty commercial and specialty personal product lines, priced an IPO downsized by 33% below the range and ended its first day of trading up less than 1%.
- Houlihan Lokey, a leading global independent investment bank with expertise in mergers and acquisitions, financings, financial restructurings and financial advisory services, priced an IPO downsized by 20% below the range and gained 7% in first-day trading.
- Benitec Biopharma, a clinical-stage biotechnology company developing a novel, proprietary therapeutic technology platform that combines gene silencing and gene therapy with a goal of providing sustained, long-lasting silencing of disease-causing genes from a single administration, priced a downsized IPO below the expected price and declined 13% on its first day of trading.