Another biotech IPO has beaten the market blues. Keros Therapeutics (NASDAQ:KROS) finished the week up 35%, affirming that the biotech industry won’t be deterred by current market volatility.
Oncology biotech Keros Therapeutics priced its upsized IPO at the high end to raise $96 million at a $325 million fully diluted market cap (+12% vs. original midpoint). The company priced its IPO at a 19% premium to its last capital raise in March 2020, and it believes its cash balance of $149 million will last into the 2H22. Keros’ lead candidate, KER-050, is beginning a Phase 2 trial for anemia and thrombocytopenia associated with myelodysplastic syndromes (MDS). The company believes KER-050 will treat all stages of MDS, making it superior to current therapies. Keros finished the week up 35%.
The IPO Index jumped 11.3% this past week, compared to a 10.4% increase for the S&P 500. The Index’s top performers were Levi Strauss (LEVI; +45% this week), Farfetch (FTCH; +42%), StoneCo (STNE; +41%), Allakos (ALLK; +40%), PPD (PPD; +38%), and Lyft (LYFT; +38%). The Vix Volatility Index settled to its lowest level in a month; if this trend continues, we could see IPO volume begin to normalize by summer.
|
Issuer |
Deal |
Market Cap |
Price vs. |
First Day |
Return |
|---|---|---|---|---|---|
|
Keros Therapeutics |
$96M |
$325M |
7% |
+26% |
+35% |
|
Phase 1 biotech developing therapies for blood and musculoskeletal disorders. |
|||||
This past week, Airbnb (AIRB) agreed to pay more than 10% interest on the $1 billion it raised from private equity lenders. The investors also received warrants that they can convert at an $18 billion valuation, a large drop from the $50 billion valuation it once sought.
Trading in Luckin Coffee (NASDAQ:LK) was halted this past week as regulators continue to investigate claims of fraud related to overstated revenue. Two more US-listed Chinese issuers, TAL Education Group (NYSE:TAL) and iQIYI (NASDAQ:IQ), are now facing accusations of financial misconduct as well.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 4/8/20, the Renaissance IPO Index was down 14.2% year-to-date, while the S&P 500 was down 14.9%. Renaissance Capital’s IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (NYSE:UBER) and Spotify (NYSE:SPOT). The Renaissance International IPO Index was down 9.9% year-to-date, while the ACWX was down 21.7%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and Adyen.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
Be the first to comment