The IPO market produced six IPOs in September, bringing the total number of IPOs over the first three quarters of the year to 122.
After picking up pace in June when the IPO market produced 33 IPOs, the highest monthly count since August of 2000, the monthly IPO count declined sequentially over the third quarter to produce a total of 31 IPOs—only three IPOs over the 28 produced in the first quarter of the year. The year’s IPO count through September 30 nonetheless represents the fifth highest first three quarter total in the fifteen years since the end of the dot-com era.
Gross proceeds in September were $746.5 million. Total gross proceeds over the first three quarters of 2015 of $18.3 billion are 72% below the $64.3 billion figure over the first three quarter of 2014 (with last year’s total buoyed by Alibaba’s $21.8 billion IPO, the largest US IPO in history). Total gross proceeds through September 30 is the fourth lowest first three-quarter total over the last twenty years.
Year-to-date, there have been no billion-dollar IPOs and only six IPOs over $500 million. In comparison, the three quarters of 2014 produced nine billion-dollar IPOs with an additional dozen raising more than $500 million. While 2014 was the high-water mark for large offerings since the dot-com apogee, the three years prior to 2014 produced an average of five billion-dollar offerings with an additional eight raising $500 million or more.
Despite the dearth of large IPOs, median offering size has increased 1.5%, from $96.0 million for full-year 2014 to $97.5 million over the first three quarters of 2015.
Emerging growth companies (EGCs), which have accounted for all but seven of the year’s IPOs, have had a median offering size of $92.3 million, compared to $441.0 million for non-EGC IPO companies.
With life sciences companies—typically yet to attain profitability or generate significant revenue—accounting for 48% of all IPOs over the first three quarters of 2015, IPO companies over the first three quarters of 2015 had median annual revenue of $37.8 million and only 30% were profitable.
The average IPO over the first three quarters of the year produced a first-day gain of 18%, up from the 14% average first-day gain for all 2014 IPOs. Over the first three quarters of 2015, 25% of IPOs were “broken” (IPOs whose stock closes below the offering price on their first day), equal to the average over the five preceding years.
At September 30, however, the average 2015 IPO was trading 4% below its offering price, and 77% of the year’s offerings were trading below their first-day closing price.
IPO activity in September consisted of offerings by the following companies listed in the order they came to market:
- REGENXBIO, a leading biotechnology company focused on the development, commercialization and licensing of recombinant adeno-associated virus gene therapy, priced an IPO upsized by 13% above the original range and gained 38% from its offering price on its first trading day.
- Nabriva Therapeutics, a clinical stage biopharmaceutical company engaged in the research and development of novel anti-infective agents to treat serious infections, with a focus on the pleuromutilin class of antibiotics, priced below the range and gained 29% in first-day trading.
- Penumbra, a global interventional therapies company that designs, develops, manufactures and markets innovative medical devices, priced an IPO upsized by 5% above the range and produced a first-day gain of 38%.
- Edge Therapeutics, a clinical-stage biotechnology company that discovers, develops and seeks to commercialize novel, hospital-based therapies capable of transforming treatment paradigms in the management of acute, life-threatening conditions, priced an IPO upsized by 29% below the range and ended its first day of trading 18% above its offering price.
- Mirna Therapeutics, a clinical-stage biopharmaceutical company developing a broad pipeline of microRNA-based oncology therapeutics, priced at half the original midpoint of the range and gained less than 1% in first-day trading.