Wall Street expects some thunder and lightning to sweep into the Valley of IPOs this week. The sound effects may precede the kind of rain that favors the rainmakers and investors alike. Two of the six deals on the calendar are reportedly on everybody’s “most wanted” list and two are said to be “in play.” Anything can happen with the other two. This will be one of the busiest IPO weeks of the year so far.
Designer Drugs And The Etsy Economy
The two IPOs on the “most wanted” list this week hail from two radically different sectors – pharmaceuticals, or more specifically, the biopharma world – and business services, which is a category so broad that it seems so plain vanilla, except when it’s not.
Aduro Biotech (ADRO – proposed) of Berkeley, California, is a clinical-stage immuno-oncology company focusing on the development of first-in-class technology platforms designed to stimulate robust and durable immune responses against cancer. Immuno-oncology encompasses a class of therapies that leverage the patient’s immune system to slow the growth and spread of, or eliminate, tumor cells. The company’s lead product candidate is in a randomized controlled Phase 2b clinical trial involving patients with late-stage metastatic pancreatic cancer.
Worth noting: Johnson & Johnson Development Corp., an existing stockholder, has indicated an interest in buying up to $30 million worth of stock in the IPO. Aduro has also attracted attention from insiders who have indicated an interest in buying up to an additional $12.5 million worth of stock in the initial public offering. Novartis Institutes for BioMedical Research, an existing stockholder and an affiliate of Novartis Pharmaceuticals Corp., a collaboration partner, has entered into a purchase agreement to buy about $25 million worth of stock in a separate private-placement transaction.
(For more information, please click here: Aduro Biotech)
Etsy (ETSY – proposed) is a Brooklyn-based operator of a marketplace enabling people, both online and offline, to make, sell and buy unique goods. Handmade goods are the foundation of the company’s marketplace, which the company calls the Etsy Economy. It is where entrepreneurs find meaningful work in both global and local markets for their goods, and where consumers discover and buy unique goods and build relationships with the people who sell them.
The company’s revenue increased to $195.6 million for the year ended Dec. 31, 2014, UP from $125 million for the year ended Dec. 31, 2013, and UP from $74.6 million for the year ended Dec. 31, 2012. Its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) rose to $23.1 million, UP from $16.9 million for the year ended Dec. 31, 2013, and UP from $10.6 million for the year ended Dec. 31, 2012.
(For more information, please click here: Etsy)
Party Time
These two deals are said to be “in play,” according to the IPO professionals.
Party City Holdco (PRTY – proposed) is an Elmsford, New York-based party goods retailer. The company believes it is the leading party goods retailer in North America. It operates about 880 locations in the United States and Canada. It is also the largest global party goods retailer with over 40,000 retail outlets worldwide. For the year ended Dec. 31, 2014, Party City reported net income of $56.1 million on revenues of $2.3 billion versus net income of $4 million on revenues of $2 billion for the same period a year ago, according to the prospectus.
(For more information, please click here: Party City Holdco)
Virtu Financial (VIRT – proposed) is a New York City-based technology market maker and liquidity provider to the global financial markets. The company provides quotations to buyers and sellers in more than 10,000 securities and other financial instruments on more than 210 unique exchanges, markets and liquidity pools in 30 countries around the world. For the year ended Dec. 31, 2014, Virtu Financial reported net income of $190.1 million on revenues of $723.1 million versus net income of $182.2 million on revenues of $664.5 million for the same period a year ago.
(For more information, please click here: Virtu Financial)
Wild Cards
Anything could happen with the remaining two deals on this week’s IPO calendar. One is a biotech and the other is a pharmaceutical company. Neither one has reported any revenue to date. Neither company has reported any collaborations.
Cidara Therapeutics (CDTX– proposed) is a San Diego, California-based biotechnology company focused on the discovery, development and commercialization of novel anti-infectives to treat diseases that are inadequately addressed by current “standard of care” therapies. The company’s initial proprietary product candidates are for the treatment of serious fungal infections. Cidara’s second product candidate is for the treatment of vulvovaginal candidiasis, a prevalent yeast infection. As many as three out of four women will suffer a vaginal yeast infection at least once during their lifetimes, according to the Mayo Clinic’s website.
To date, the company has reported no revenue, and there is no mention of collaborations in its recent prospectus.
Certain of the company’s existing investors and their affiliates have indicated an interest in purchasing about $25 million worth of stock in the offering.
(For more information, please click here: Cidara Therapeutics)
KemPharm (KMPH – proposed) is a Coralville, Iowa-based clinical-stage specialty pharmaceutical company engaged in the discovery and development of proprietary prodrugs that it believes will be improved versions of widely prescribed, approved drugs. KemPharm’s leading drug candidate is a pain killer – similar to hydrocodone, an opioid drug – with a molecular structure that would make it hard to abuse. The company is also working on drugs to treat ADHD (attention deficit hyperactivity disorder) as well as schizophrenia, bipolar disorder and major depressive disorder.
To date, the company has reported no revenue, and there is no mention of collaborations in its recent prospectus.
One of KemPharm’s existing stockholders, an entity affiliated with Deerfield Private Design Fund III, has indicated an interest in purchasing up to $10 million worth of stock in the offering.
(For more information, please click here: KemPharm)
Looking into next week, the IPO calendar is clean and green. Nevertheless, it has been known to quickly fill up on Monday mornings.
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 opinions.