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US IPO Weekly Recap: Biotech hot streak continues amid another wave of SPACs

Lyra Therapeutics (LYRA) popped 16% in its IPO this past week, the latest biotech to surge in its public debut. It was joined by three SPACs, continuing an uptick in blank check activity.

Despite enduring the slowest spring since the financial crisis, the IPO market continues to recover and is now up 39% from its mid-March low. IPO candidates have begun moving forward or delaying depending on their coronavirus exposure. Large IPO filer Procore Technology (PCOR) chose to tap private markets this week, and Fortive’s transportation industrials spin-off Vontier (VNT) withdrew its estimated $1 billion offering. Three SPACs submitted initial filings, and we expect the pipeline to build further entering May and June.

Lyra Therapeutics (LYRA) priced at the $16 high end to raise $56 million. The company’s lead candidate, LYR-210, is an ENT drug-device delivering a generic steroid to treat chronic rhinosinusitis (CRS), with Phase 2 results expected by year-end. Lyra went public at a fully diluted market value of $207 million, below the $219 million it has raised in total funding, reflecting the disappointing sales generated by close peers’ ENT devices. Lyra opened Friday up 31% before settling to a 16% return.

US tech-focused Social Capital Hedosophia II (IPOBU) led another wave of SPACs, upsizing its deal to raise $360 million. Formed by Chamath Palihapitiya’s Social Capital and Ian Osborne’s Hedosophia, it comes on the heels of their international tech-focused Social Capital Hedosophia III (IPOCU).

Fortress Investment Group’s Fortress Value Acquisition (FVACU) raised $300 million. The SPAC is led by CEO Andrew McKnight and Chairman Joshua Pack, both of whom are managing partners at Fortress.

Both groups’ previous SPACs, Social Capital Hedosophia and Mosaic Acquisition, respectively, are leading a wave of high-profile acquisitions.

Cannabis SPAC Collective Growth Corp (CGROU) raised $150 million for former Canopy Growth (NYSE: CGC) CEO Bruce Linton and National Hemp Association Chairman Geoffrey Whaling.

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Three SPACs submitted initial filings. Jaws Acquisition (JWAC.RC), which is led by Starwood Capital founder Barry Sternlicht, filed to raise $400 million to acquire a growth-oriented company in an industry that does not compete with Starwood. Led by tech industry veterans, Novus Capital Corp (NOVSU) filed to raise $100 million to acquire a company in the smart technology innovations market. Longview Acquisition (LGVW.U), a blank check company formed by executives at Glenview Capital, filed to raise $300 million.

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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 4/30/20, the Renaissance IPO Index was flat at 0% year-to-date, while the S&P 500 was down 9.9%. Renaissance Capital’s IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (UBER) and Spotify (SPOT). The Renaissance International IPO Index was down 2.4% year-to-date, while the ACWX was down 18.5%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Adyen and Meituan-Dianping.
The article US IPO Weekly Recap: Biotech hot streak continues amid another wave of SPACs originally appeared on IPO investment manager Renaissance Capital’s web site renaissancecapital.com.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital’s research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital’s Renaissance IPO ETF (symbol: IPO), Renaissance International ETF (symbol: IPOS), or separately managed institutional accounts may have investments in securities of companies mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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