The November IPO market produced a dozen IPOs with gross proceeds of $1.30 billion.
The month’s tally brings the total number of IPOs over the first 11 months of 2015 to 150 with total gross proceeds of $24.63 billion—35% below the 231 IPOs over the first 11 months of 2014 and 10% below the 167 IPOs over the first 11 months of 2013.
Gross proceeds over the first 11 months of 2015 represent the third-lowest figure over the last 12 years, behind all but 2008 and 2009.
November saw five IPOs by life sciences companies, bringing the total number over the first 11 months of 2015 to 72 IPOs, or 48% of the total, compared to 40% of all IPOs in 2014 and 28% in 2013.
The median offering size for IPOs over the first 11 months of 2015 was $91.7 million, 5% below the $96.0 million median figure for full-year 2014 and the second lowest annual figure since 2000—only the $89.3 million median figure for 2004 was lower.
Emerging growth companies (EGCs), which have accounted for all but 10 of the year’s IPOs, have had a median offering size of $81.0 million, compared to $450.5 million for non-EGC IPO companies. The median life sciences IPO company over the first 11 months of 2015 had an offering size of $71.8 million, compared to $128.5 million for all other IPO companies.
The lower overall median offering size in 2015 is largely attributable to the higher proportion of IPOs by life sciences companies. Excluding life sciences companies, the $128.5 million median offering size for 2015 is slightly above the $128.1 million median offering size for non-life sciences IPOs that prevailed over the preceding five year period
The lower overall number of IPOs and higher proportion of life sciences companies, however, only partly explain the nearly two-thirds decline in gross proceeds from 2015. The first 11 months of 2015 have produced only a solitary billion-dollar IPO with an additional seven IPOs raising gross proceeds of at least $500 million, compared to nine billion-dollar IPOs in 2014 with an additional 15 IPOs raising $500 million or more.
Even excluding the $21.77 billion Alibaba IPO, the largest IPO in history, $500 million plus IPOs were responsible for gross proceeds of $26.96 billion in 2014—more than the gross proceeds total for all IPOs in the first 11 months of 2015. Total proceeds from IPOs with gross proceeds more than $500 million for the first 11 months of 2015 were only $7.57 billion.
The median annual revenue of IPO companies over the first 11 months of 2015 was $37.8 million, down 45% from the $68.2 million median figure for full-year 2014. Median annual revenue of IPO companies year-to-date is less than one half the $89.9 million median figure for 2013 and less than one-third the $133.6 million median figure for 2012.
The percentage of IPO companies that are profitable has declined to 30% over the first 11 months of 2015, compared to 36% for all 2014 IPO companies and 46% in 2013.
The average IPO over the first 11 months of 2015 produced a first-day gain of 16%, the second highest annual average first-day gain figure since 2000 behind only the 21% average first-day gain figure for 2013. Over the first 11 months of 2015, one-quarter of IPOs were “broken” (IPOs whose stock closes below the offering price on their first day), compared to 27% of IPOs for full-year 2014.
At November 30, the first-day gain for the average 2015 IPO company had been almost entirely erased in the aftermarket, with the average IPO company trading less than 1% above its offering price. At November month-end, 28% of 2015 IPO companies were trading at least 20% above their offering price, but almost half (49%) were trading below their offering price, with 63% of all 2015 IPO companies trading below their first-day closing price.
IPO activity in November consisted of offerings by the following companies listed in the order they came to market:
- Advanced Accelerator Applications, an innovative radiopharmaceutical company that develops, produces and commercializes molecular nuclear medicine products, priced at the midpoint of the range and produced a first-day gain of 53%.
- Equity Bancshares, a bank holding company headquartered in Wichita, Kansas, priced an IPO upsized by 8% within the range and gained 6% from its offering price in first-day trading.
- Voyager Therapeutics, a clinical-stage gene therapy company focused on developing life-changing treatments for patients suffering from severe diseases of the central nervous system, priced an IPO upsized by 7% below the range and ended its first day of trading up 27% from its offering price.
- WAVE Life Sciences, a preclinical biopharmaceutical company with an innovative and proprietary synthetic chemistry drug development platform that the company is using to design, develop and commercialize a broad pipeline of first-in-class or best-in-class nucleic acid therapeutic candidates, priced an IPO upsized by 28% at the midpoint of the range and was flat in first-day trading.
- Instructure, a provider of an innovative, cloud-based learning management platform for academic institutions and companies worldwide, priced at the low end of the range and produced a first-day gain of 13%.
- Mesoblast, a global leader in the field of regenerative medicine having leveraged its proprietary technology platform, which is based on specialized cells known as mesenchymal lineage adult stem cells to establish what it believes to be the most advanced regenerative medicine product portfolio in the industry, priced an IPO upsized by 30% below the expected price and edged up 1% in first-day trading.
- Xtera Communications, a leading provider of high-capacity, cost-effective optical transport solutions, supporting the high growth in global demand for bandwidth, priced at the expected price (but well the original range) and ended its first day of trading flat.
- Match Group, the world's leading provider of dating products operating a portfolio of over 45 brands, priced at the low end of the range and produced a first-day gain of 23%.
- Mimecast, a leading provider of next generation cloud security and risk management services for corporate information and email, priced at the low end of the range and ended its first day of trading up 1% from its offering price.
- Square, a mobile payment service provider for small businesses, priced below the range and gained 45% in first-day trading.
- Axsome Therapeutics, a clinical stage biopharmaceutical company developing novel therapies for the management of pain and other central nervous system disorders, priced below the range and ended its first day of trading down 3% from its offering price.
- Duluth Holdings, a rapidly growing lifestyle brand of men’s and women’s casual wear, workwear and accessories sold exclusively through the company’s own channels, priced below the range and produced a 14% first-day gain.