The Oscars landed over the weekend, and Sunday night saw no shortage of glitz, glamour, and long-winded acceptance speeches. We would love to follow suit in today’s recap of February’s new issuance market activity, but, unfortunately, thus far in 2016, the ongoing IPO slump has given us little to talk about.
Already, 2016 has flirted with breaking the record for the latest first debut of the year. Thankfully, the first two weeks of February saw four IPOs step up, with two debuting each week. (A handful of debuts that would have added to the total were postponed throughout the month.) All four IPOs (Editas Medicine Inc., BeiGene, LTD., AveXis, Inc. and Proteostasis Therapueutics, Inc.) hailed from the Healthcare sector.
Unfortunately, despite Healthcare (fittingly) shocking the market back to life and saving it from the infamy of breaking an ignominious record for slowest opening to the year, not much has happened since.
After a slightly promising (by comparison) first half of the month, we slumped again. The last two weeks of February were the fifth and sixth weeks of the year that saw no IPOs priced. Thus far, the aforementioned four IPOs are all that have hit the market, for combined proceeds of $435.7M, which marks the smallest number of debuts in the first two months of the year since 2009 (when one IPO priced for $828.0M). And we all know what the markets were dealing with in 2009 – see Oscar nominee The Big Short for more info.
Looking back on the first two months of the past five years, there has been an average of 24 market debuts that generated an average of $5.9B in combined proceeds. The most active year in terms deal count of those five years was 2014, which saw 37 deals price for total proceeds of $7.8B. Meanwhile, the least active of the last five years in terms of deal count were 2012 and 2013, each having 20 deals price raising $2.0B and $6.2B, respectively.
So far this week, as we enter March, only Syndax Pharmaceuticals Inc., is expected to price. Specifically, Syndax has an initial filing range of $14.00 to $16.00 per share and is looking to bring in $66.0M in its debut. Looking even further ahead, the current 6-month IPO backlog stands at 50 issuers seeking to raise $7.3B, slightly below the 61 deals for $8.9B in the prior-year period. Healthcare continues to dominate in terms of deal count, with 21 issuers looking to raise $2.4B in proceeds, while Consumer Services takes the top spot in terms of proceeds with 12 issuers seeking to generate $2.8B.
Hopefully we’ll have a bountiful Spring on our hands, like last year. But so far, few signs point that way.