The IPO market has been hot in 2015 so far, with nearly 30 IPO’s coming just last month in June. One major contributor to the IPO market has been the biotech industry, with a multitude of biotech companies becoming publicly traded this year already, and several more coming in the second half of this year. Investors should keep their eyes on the following three stocks as they set to become publicly traded later this week, and could be potentially solid investment opportunities in the future.
BioCardia
San Carlos, California-based BioCardia is a regenerative medicine company that is scheduled for its initial public offering later this week. The company’s IPO is designed to raise $57.5 million, with 3.47 million shares being offered at a price range of $12-$14. The company will trade on the NASDAQ under the ticker “BCDA.” Cantor Fitzgerald and Roth Captial are the top two underwriters for the deal.
BioCardia is expecting to begin enrolling patients into a pivotal phase III study for a new cell therapy that is for ischemic systemic heart failure later this year, though data won’t be available until 2017. If successful, the new therapy could be the first cell-based therapy that treats heart failure to reach the market. In the meantime, the company has also been approved to sell a line of catheters and sheaths in the U.S., in addition to a biotherapeutic delivery system in Europe.
BioCardia posted a loss of $10.2 million on revenue of $822,000 in 2014, this compared to revenue of $1.5 million and a net loss of $5.5 million in 2013. If the company is successful in its venture into its new cell therapy, there could be major success and profits on the horizon, though when exactly that success may come has yet to be determined.
Chiasma
Chiasma, a Newton, Massachusetts based late-stage biotech will also be launching its IPO this week. The company plans to raise $75 million by offering 5.36 million shares with a price range of $13 to $15 on the NASDAQ under the ticker CHMA. At the midpoint of the proposed range, the company would command a fully diluted market value of $375 million. Barclays (BCS - Analyst Report) and Cowen & Company will serve as the main underwriters for the deal.
Chiasma has claimed that its proprietary technology can be used to develop oral therapies for treatments that are only available through painful injections. The company is currently in the process of developing an oral drug candidate for acromegaly, a disease of the pituitary gland.
Chiasma had revenues of $8.6 million for the last 12 months, and a loss of $9 million for the same period. If able to get approval for the marketing and sale of its oral octreotide for adults with acromegaly, the company stands to gain substantially in revenues and possibly see profits. The company has had success with the sale of other drugs since its start in 2001, and is hoping the future holds similar successes. Their IPO is scheduled for Friday.
ProNai Therapeutics
The largest of the three biotech IPOs this week, Vancouver, Canada-based ProNai Therapeutics is set to become publicly traded on the NASDAQ under the ticker DNAI later this week. The company is set to raise $101 million by offering 6.7 million shares at a price range of $14-$16.Bank of America’s (BAC - Analyst Report) Merrill Lynch and Jeffries Group Inc are the top underwriters on the deal.
ProNai was founded in 2003, and is in the process of developing cancer therapies based on DNA interference. The company’s drugs contain DNA fragments that target disease-causing genes and deactivate them. The drug has seen significant success in trials with cancer patients thus far and could bring massive revenues to the company.
Moving Forward
The above three Biotech’s have all seen success in trials with their respective drugs, and if or when these drugs are approved for marketing and sale, all three companies could see major boosts in revenues, which could bring major success to investors.
With their market caps that are both above $350 million, ProNai and Chiasma are in the top 25% of the last 100 biotechs by size. This is significant for investors to know because this larger biotech subset has averaged +80% from their offer price, which compares to an average of +40% for the bottom 75% of biotech stocks.
Be sure to check back with Zacks in the following days to see just how these three biotech stocks perform on their respective first days of trading.
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