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The IPO market is currently red-hot.
Three companies in the last week traded more than 85% above their issue price — two of which traded more than 100% higher!
Without a doubt, there’s a feeling of euphoria that exists currently. But this euphoria should be a cautionary sign to investors and traders alike.
A total of seven IPOs are scheduled this week including six biotech companies. Five of the six will become a public company with a sub $500m market cap
Akero Therapeutics Inc. (AKRO) – They are a clinical-stage biotechnology company focused on developing and commercializing transformative treatments for serious metabolic diseases with high unmet medical need.
Atreca Inc (BCEL) – They are a biopharmaceutical company utilizing their differentiated platform to discover and develop novel antibody-based immunotherapeutics to treat a range of solid tumor types.
Dermavant Sciences Inc (DRMV) – They are a clinical-stage biopharmaceutical company dedicated to developing and commercializing innovative therapeutics in medical dermatology.
Personalis Inc (PSNL) – They are a growing cancer genomics company transforming the development of next-generation therapies by providing more comprehensive molecular data about each patient’s cancer and immune response.
Prevail Therapeutics (PRVL) – They are a gene therapy company leveraging breakthroughs in human genetics with the goal of developing and commercializing disease-modifying AAV-based gene therapies for patients with devastating neurodegenerative diseases.
Stoke Therapeutics (STOK) – They are pioneering a new way to treat the underlying causes of severe genetic diseases by precisely upregulating protein expression.
Market sentiment and political rhetoric surrounding the healthcare sector of the market is up-in-the air. Democrats, Republicans, rich and poor have collectively made drug companies their own personal punching bags and that will likely be the case as an election year knocks on the door in 2020.
These biotech companies, and their respective drugs, are in various stages of clinical trials (if they are even that far), are nearly all unprofitable and in need of cash, and many have exhausted just about all resources in the private market.
So which biotech IPOs should people buy?
Here’s a quote from Reuters a few years back that stuck with us…its from an anonymous capital markets banker.
“I would not say the market is saturated,” said one of the bankers. “But investors may have to do triage: figure out what they’re going to spend money on and what they’re not going to fund.”
Translation: Investors are going to be selective and not every deal will work.
If you are an investor who has the capital to indicate for Pre-IPO stock, make sure you indicate for ones in demand; ones that have strong guidance, ones that the experts in the field are interested in. That will put you in a good position to sell or start a position in the aftermarket.
Beyond the comprehensive research, IPO Boutique provides daily advisories on how the deal is building, when the books will close and what is the latest price guidance to make sure you INDICATE WITH CONFIDENCE.
Why make it a guessing game? Especially in the highly-volatile healthcare sector. You want to be in a deal where there is demand and strong hands to keep the deal intact in its critical first few days.
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