The IPO market picked up pace in May, with the month producing 16 IPOs. The five-month tally of 58 IPOs is 43% below the 102 IPOs over the first five months of 2014, but nonetheless represents the fifth highest first five-month tally since 2000—trailing only 2014, the 78 IPOs in the first five months of 2007, the 64 IPOs in the first five months of 2006 and the 61 IPOs in the first five months of 2012.
Gross proceeds in May were $2.31 billion bringing total gross proceeds for the first five months of 2015 to $7.78 billion, 63% less than the $20.77 billion in gross proceeds raised over the first five months of 2014.
Life sciences companies once again dominated deal flow, accounting for half of the month's total and bringing the number of life sciences company IPOs over the first five months of 2015 to 30, 52% of the total.
Emerging growth companies (EGCs) have accounted for all but four IPOs over the first five months of 2015, or 93% of the total, compared to 85% of all IPOs in 2014.
The first five months of 2014 produced four billion dollar IPOs with an additional five raising more than $500 million. The first five months of 2015 have yet to produce a billion dollar IPO and have seen only a single IPO over $500 million.
The median IPO offering size declined by 11% from $107.4 million in 2013 to $96.0 million in 2014 and fell a further 14% to $82.3 million over the first five months of 2015—the lowest annual figure since the $61.6 million median IPO offering size in 2000.
The median life sciences IPO offering size in the first five months of 2015 was $65.0 million, compared to $128.5 million for all other companies.
The median life sciences IPO offering size in 2015 is, however, largely in line with the $62.4 million median figure for life sciences IPO companies over the five years preceding 2015. Similarly, the median non-life sciences IPO offering size of $128.1 million was in line with the figure for 2010 to 2014.
The median annual revenue for IPO companies fell by 53% from $68.2 million in 2014 to $32.0 million in the first five months of 2015—the lowest annual figure since the $17.6 million median in 2000. This decline is partly attributable to the increased market share of IPOs by life sciences companies in 2015.
Fewer than half of the life sciences IPO companies in the first five months of 2015 were generating any revenue, compared to a median annual revenue of $116.2 million for all other IPO companies.
Following only a single "broken" IPO in April (an IPO whose stock closes below the offering price on its first day), seven IPOs, 44% of the month's total, were broken in May. The percentage of broken IPOs over the first five months of 2015 stands at 29%, above the 27% of IPOs that were broken for full-year 2014.
The average IPO in the first five months of 2015 produced a first day gain of 14%, equal to the average first-day gain for all 2014 IPOs. The average life sciences company IPO produced a first day gain of 9% while the average non-life sciences company IPO more than doubled that with a 19% gain.
The average 2015 IPO ended the month 22% above its offering price, outperforming both the Dow Jones Industrial Average and Nasdaq Composite Index. The average 2015 life sciences IPO company ended May 15% above its offering—trailing the 20% year-to-date gain seen by the NASDAQ Biotechnology Index—compared to 29% for all other 2015 IPO companies.
At May month-end, one-third of all 2015 IPOs were trading below their offering price, compared to 38% for all IPOs in 2014.
IPO activity in May consisted of offerings by the following companies listed in the order they came to market:
- OpGen, an early commercial stage company using molecular testing and bioinformatics to assist healthcare providers to combat multi-drug-resistant bacterial infections, priced at the midpoint of a downwardly revised price range and ended its first day of trading down 19% from its offering price.
- Apadtimmune Therapeutics, a clinical-stage biopharmaceutical company focused on novel cancer immunotherapy products based on its T-cell receptor platform, priced an IPO upsized by 20% at the top of the range and ended its first trading day 6% below its offering price.
- CoLucid Pharmaceuticals, a Phase 3 clinical-stage biopharmaceutical company that is developing an innovative and proprietary small molecule for the acute treatment of migraine headaches, priced an IPO upsized by 3% below the originally proposed range and declined 20% in first-day trading.
- HTG Molecular Diagnostics, a commercial stage company that developed and markets a novel technology platform to facilitate the routine use of complex molecular profiling, priced at the midpoint of the range and edged down to end its first day of trading 2% below its offering price.
- aTyr Pharma, engaged in the discovery and clinical development of innovative medicines for patients suffering from severe, rare diseases using its knowledge of Physiocrine biology, a newly discovered set of physiological modulators, priced at the midpoint of the range and produced a first-day gain of 7%.
- Collegium Pharmaceuticals, a Phase 3 clinical-stage biopharmaceutical company that is developing an innovative and proprietary small molecule for the acute treatment of migraine headaches, priced at the low end of the range and gained 2% from its offering price in first-day trading.
- Bojangles', a highly differentiated and growing restaurant operator and franchisor dedicated to serving customers high-quality, craveable food made from its Southern recipes, priced an IPO upsized by 24% over original terms at the high end of an upwardly revised price range and ended its first day of trading with a 25% gain.
- Jaguar Animal Health, an animal health company focused on developing and commercializing first-in-class gastrointestinal products for companion and production animals, priced at the expected price and declined 3% from its offering price in first-day trading.
- Fenix Parts, a leading recycler and reseller of original equipment manufacturer automotive products, priced an IPO upsized by 9% below the range and produced a first-day gain of 5%.
- Galapagos, a clinical-stage biotechnology company specialized in the discovery and development of small molecule medicines with novel modes of action, addressing disease areas of high unmet medical need, priced an IPO twice upsized by a total of 39% and ended its first trading day with a 20% gain.
- Arcadia Biosciences, a leading agricultural biotechnology trait company with an extensive and diversified portfolio of late-stage yield and product quality traits addressing multiple crops that supply the global food and feed markets, priced an IPO upsized by 15% at the expected price and declined 9% from its offering price on its first trading day.
- Fortress Transportation and Infrastructure Investors, an owner and acquirer of high quality infrastructure and equipment that is essential for the transportation of goods and people globally, priced below the range and ended its first day of trading 3% below its offering price.
- Black Knight Financial Services, a leading provider of integrated technology, workflow automation and data and analytics to the mortgage industry, priced an IPO upsized by 6% above the midpoint of the range and produced a first-day gain of 11%.
- Baozun, the leading brand e-commerce solutions provider in China, priced below the range and gained 4% in first-day trading.
- Press Ganey Holdings, a leading provider of patient experience measurement, performance analytics and strategic advisory solutions for healthcare organizations across the continuum of care, priced above the range and ended its first day of trading with a 10% gain.
- Shopify, a provider of a leading cloud-based commerce platform designed for small and medium-sized businesses, priced above an upwardly revised price range and produced a first-day gain of 51%.