Just one IPO is in the wings this week – and it hails from the biopharma sector. This isn’t a coincidence. Any time an industrial sector outperforms the broad U.S. stock market, it can catch the investor’s eagle eye. This is what has happened since the three major U.S. stock indexes bottomed out on March 23, 2020 – just two weeks ago.
On that date, March 23rd, the S&P 500 Index closed at its most recent low of 2,237.40. On Friday, April 3rd, the S&P 500 closed at 2,488.65, up 11.2 percent from that low.
In contrast, the Dow Jones U.S. Pharmaceuticals & Biotechnology Index outperformed the S&P 500 by 36.6 percent over the same time span. Let’s take a look.
On Monday, March 23rd, the Dow Jones U.S. Pharmaceuticals & Biotechnology Index (DJUSPN) closed at its most recent low of 657.45. On Friday, April 3rd, it closed at 757.75, up 15.3 percent from its low.
Speedy Pricing
Wall Street’s interest in the U.S. biopharma sector jumped last week when Zentalis Pharmaceuticals (ZNTL) hit the IPO Calendar. On Monday, March 30th, Zentalis filed with the SEC to offer 7.65 million shares at $16 to $18 each. The IPO was priced just three days later (on Thursday night, April 2nd). A quick pricing like this was very unusual.
In addition to the speed in getting the deal out the door, Zentalis was priced at the high end of its range, $18, and bankers increased the number of shares to 9.18 million, up from 7.65 million.
Zentalis closed on Friday, April 3rd, its first day of trading, at $23.20, up 28.9 percent from its IPO price.
On the Biopharma Bandwagon
The pharmaceutical and biotech sector looks like it’s on a roll. That brings us to this week, when another IPO from this sector is the only deal on tap.
Keros Therapeutics (KROS proposed), based in Lexington, Massachusetts, is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel treatments for patients suffering from hematological and musculoskeletal disorders (such as anemia and osteoporosis) with high unmet medical need.
The company plans to offer 5 million shares at $14 to $16 each on Tuesday evening, April 7th, to trade on Wednesday morning, April 8th. This is a NASDAQ listing.
(For more information about this company, please check the profile on IPOScoop.com’s website.)
A Holiday-Shortened Week
This week, of course, is a short one for Wall Street. Passover begins at sundown on Wednesday, April 8th.
The U.S. stock exchanges will be closed on Friday, April 10th, for Good Friday.
April’s Second Week
This brings us to the week of April 13th and the IPO Calendar is blank so far. But some players could jump quickly onto the IPO Calendar when the U.S. Securities and Exchange Commission’s filing window opens again for business on Monday, April 6th.
Stay tuned.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinion.