The 2014 IPO market got off to its earliest start since 1998 as the inaugural IPO of the year came to market in the first full week of January. The month ended with 16 IPOs—only one shy of the combined January IPO total over the preceding three years, and the highest January tally since the 20 IPOs in January 2000. The last day of January alone produced six IPOs—a daily count that high seen only three times since the end of 2000.
Continuing a trend from 2013, the life sciences sector produced the largest number of IPOs in the month, with six. Energy-related companies contributed five IPOs in January.
Gross proceeds of $5.15 billion for January were 57% higher than the $3.29 billion for the corresponding month in 2013. The largest January 2014 IPO was the $1.80 billion offering by Santander Consumer US, followed by offerings from oil and gas companies Rice Energy ($924 million) and EP Energy ($704 million).
The average January IPO saw a first day gain of 25% compared to the 21% first-day gain for the average IPO in 2013, but the 2014 figure was buoyed by two “moonshots” (an IPO that doubles in price on its opening day). Without the IPOs of Dicerna Pharmaceuticals and Ultragenyx Pharmaceutical, which enjoyed first-day gains of 207% and 102%, respectively, the average first-day gain for IPOs in January would have been only 7%.
The average life sciences IPO in January saw a first-day gain of 56%—but only 6% without the two moonshots. The five energy-related IPOs in January declined an average of 2% on their first day of trading.
January’s median offering size of $110.5 million was 3% above the full-year 2013 figure of $107.4 million. Emerging growth companies in January had a median offering size of $90.5 million compared to the $814.0 million median deal size for non-EGC companies. The median offering size for venture-backed companies, based on a small sample size of seven IPOs in the month—was only $64.8 million in January.
The percentage of profitable IPO companies declined from 43% in full-year 2013 to 38% in January 2014.
IPO activity in January consisted of offerings by the following companies listed in the order they came to market:
- GlycoMimetics, a clinical stage biotechnology company focused on the discovery and development of novel glycomimetic drugs to address unmet medical needs resulting from diseases in which carbohydrate biology plays a key role, priced an IPO upsized by 22% at the estimated offering price and ended its first day with a 13% gain.
- CHC Group, the world’s largest commercial operator of heavy and medium helicopters, priced an IPO upsized by 5% below a downwardly revised price range and declined 2% on its first trading day.
- EP Energy, an independent exploration and production company engaged in the acquisition and development of unconventional onshore oil and natural gas properties in the United States, priced a downsized IPO below the range and ended its first day 10% below its offering price.
- RSP Permian, an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas, priced within the range and saw a first-day gain of 3%.
- Santander Consumer USA, a full-service, technology-driven consumer finance company focused on vehicle finance and unsecured consumer lending products, priced an IPO upsized by 15% at the low end of an upwardly revised price range and gained 5% on its first day.
- Rice Energy, an independent natural gas and oil company engaged in the acquisition, exploration and development of natural gas and oil properties in the Appalachian Basin, priced an IPO upsized by 10% at the high end of the range and ended its first trading day up 4%.
- Care.com, the world’s largest online marketplace for finding and managing family care, priced above the range and saw a first-day gain of 43%.
- North Atlantic Drilling, an offshore drilling company focused on operations in the North Atlantic Region, priced at the mid-point of the range and declined 8% on its first day.
- Celladon, a clinical-stage biotechnology company applying its leadership position in the field of calcium dysregulation by targeting SERCA enzymes to develop novel therapies for diseases with unmet medical needs, priced an IPO upsized by 10% at the estimated offering price and ended its first day with a 2% gain.
- Dicerna Pharmaceuticals, a biopharmaceutical company focused on the discovery and development of innovative treatments for rare inherited diseases involving the liver and for cancers that are genetically defined, priced above expectations and gained 207% on its first day of trading. Only one IPO since 2000 has enjoyed a higher first-day gain.
- Cara Therapeutics, a clinical-stage biopharmaceutical company focused on developing and commercializing new chemical entities designed to alleviate pain by selectively targeting kappa opioid receptors, priced at the low end of the range and ended its first day up 17%.
- Intrawest Resorts Holdings, a North American mountain resort and adventure company, priced below the range and declined 1% on its first day.
- Malibu Boats, a leading designer, manufacturer and marketer of performance sport boats, priced at the midpoint of the range and ended its first day with a 27% gain.
- The New Home Company, a new generation homebuilder focused on the design, construction and sale of innovative and consumer-driven homes in major metropolitan areas within select growth markets in California, priced below the range and gained 11% on its first trading day.
- Trevena, a clinical stage biopharmaceutical company that discovers, develops and intends to commercialize therapeutics that use a novel approach to target G protein coupled receptors, priced an IPO upsized by 9% at the expected price and ended its first day down 7% from its offering price.
- Ultragenyx Pharmaceutical, a development-stage biopharmaceutical company focused on the identification, acquisition, development, and commercialization of novel products for the treatment of rare and ultra-rare diseases, with an initial focus on serious, debilitating metabolic genetic diseases, priced an IPO upsized by 19% above the range and saw a first-day gain of 102%.