January 2015 IPO Market Review

January 2015 IPO Market Review

Blog The Road to IPO: Legal and Regulatory Insights into Going Public

The January IPO market produced 13 IPOs with gross proceeds of $1.24 billion, the first IPO not coming until mid-month. The last two days of January alone produced seven IPOs.

All 13 IPOs in January came from emerging growth companies, compared to 85% for full-year 2014. The life sciences sector produced eight IPOs in the month—all VC-backed. There was one VC-backed tech IPO in the month, bringing the total number of VC-backed IPOs for the month to nine.

January's median IPO offering size of $86.4 million was 10% below the full-year 2014 figure of $96.0 million.

The median offering size for VC-backed IPOs in January, at $78.3 million, was 4% higher than the $75.0 million figure for full-year 2014.

The median annual revenue for IPO companies in January was only $28.0 million—the lowest level since 2000 and 70% lower than the $68.2 million figure for full-year 2014. The median annual revenue for life sciences IPO companies in January was $2.2 million compared to $1.2 million figure for full-year 2014.

The percentage of profitable IPO companies declined from 36% in full-year 2014 to 15% in January. None of the month's life sciences IPO companies was profitable.

Buoyed by two "moonshots" (IPOs that double in price on their opening day), the average January IPO saw a first day gain of 24% compared to the 14% first-day gain for the average IPO in 2014. Without the IPOs of Shake Shack and Spark Therapeutics, which enjoyed first-day gains of 119% and 117%, respectively, the average first-day gain for January's IPOs would have been only 7%.

The average life sciences IPO in January saw a first-day gain of 16%—but only 1% without the moonshot by Spark Therapeutics.

January saw five IPOs that were "broken" (IPOs whose stock closes below the offering price on their first day), representing 38% of the month's total, compared to 27% of IPOs that were broken for full-year 2014.

IPO activity in January consisted of offerings by the following companies listed in the order they came to market:

  • CountyBancorp, a Wisconsin-based bank holding company providing financial services to agricultural businesses statewide, with a primary focus on dairy-related lending, priced below the range and ended its first trading day with a gain of 8%.
  • Patriot National, a provider of comprehensive outsourcing solutions within the workers' compensation marketplace for insurance companies, employers, local governments and reinsurance captives, priced below the range and declined 4% in first-day trading.
  • Box, a provider of a cloud-based, mobile-optimized enterprise content collaboration platform that enables organizations of all sizes to easily and securely manage their content and collaborate internally and externally, priced above the range and climbed 66% from its offering price in its first trading day.
  • Euronav, a fully-integrated provider of international maritime shipping and offshore services engaged primarily in the transportation and storage of crude oil, priced an IPO upsized by 20% and ended its first day of trading down by five cents.
  • Zosano Pharma, a clinical-stage specialty pharmaceutical company that has developed a proprietary transdermal microneedle patch system to deliver its proprietary formulations of existing drugs through the skin for the treatment of a variety of indications, priced an IPO upsized by 33% at the mid-point of the range and ended its first trading day with a one cent gain.
  • Ascendis Pharma, a clinical-stage biopharmaceutical company applying its TransCon technology to develop a pipeline of long-acting prodrug therapies with best-in-class profiles to address large markets with significant unmet medical needs, priced an IPO upsized by 20% at the high end of the range and produced a first-day gain of 5%.
  • Entellus Medical, a medical technology company focused on the design, development and commercialization of products for the minimally invasive treatment of patients in the physician office setting or operating room who are suffering from chronic sinusitis, priced an IPO upsized by 5% at the top of the range and ended its first trading day 29% above its offering price.
  • Flex Pharma, a biotechnology company that is developing innovative and proprietary treatments for nocturnal leg cramps and spasms associated with severe neuromuscular conditions, priced an IPO upsized by 17% above the range and declined 7% on its first day of trading.
  • Presbia, an ophthalmic device company that has developed and is currently marketing a proprietary optical lens implant for treating presbyopia, the age-related loss of the ability to focus on near objects, priced below the range and ended its first day of trading 19% down from its offering price.
  • Avinger, a commercial-stage medical device company that designs, manufactures and sells image-guided, catheter-based systems that are used by physicians to treat patients with peripheral arterial disease, priced an IPO upsized by 8% at the midpoint of the range and produced a first-day gain of 4%.
  • Shake Shack, a modern day "roadside" burger stand serving a classic American menu of premium burgers, hot dogs, crinkle-cut fries, shakes, frozen custard, beer and wine, priced above an upwardly revised price range and soared 119% in first-day trading.
  • Spark Therapeutics, a leader in the field of gene therapy, seeking to transform the lives of patients suffering from debilitating genetic diseases by developing one-time, life-altering treatments, priced a twice upsized IPO above an upwardly revised price range and produced a first day gain of 117%.
  • TRACON Pharmaceuticals, a clinical-stage biopharmaceutical company focused on the development and commercialization of novel targeted therapeutics for cancer, age-related macular degeneration and fibrotic diseases, priced below the range and ended its first day of trading down 6% from its offering price.