5 New Healthcare IPOs: What Investors Should Know

June continues to be a month full of IPOs from companies of all industries, and this week may just be the busiest of the month with 15 IPOs expected to be offered. One industry that is majorly contributing to this busy week is healthcare; 5 IPOs are expected to be offered, with the first becoming available for public trade today.

Below is a rundown that answers questions investors have regarding each company’s IPO, and will provide some insight into the companies themselves. It will also look at some important financial figures that they have reported.

Ritter Pharmaceuticals (RTTR)     
Becoming available for public trade as of this morning, Ritter Pharmaceuticals, is the first of the 5 to offer its IPO to investors. The company’s stock, which trades under the ticker of RTTR, opened the day at $5 per share. Its offer consisted of 4 million shares and it hoped to raise $20 million. [Update: RTTR closed its first day at $4.96.]

Ritter Pharmaceuticals develops novel therapeutic products that treat gastrointestinal diseases.  The company has struggled with profitability, as it posted a $2.5 million loss in 2014, and is on track for a loss of $5.5 million in the coming year. Its stock will be considered risky by many in the coming years as its viability is entirely dependent on the trial results of its lactose intolerance treatment. Despite its risks, the company’s potential is substantial, as it is part of a multi-billion dollar market that continues to grow.

Glaukos (GKOS)
Glaukos, a developer of treatments for glaucoma, will become available for public trade on Thursday morning. The company plans to raise $75 million with its offering of 5.35 million shares, which will open in a price range between $13 and $15. It will trade under the ticker GKOS.

Glaukos saw revenue of $45.58 million in 2014, more than double its revenue from the previous year. Despite its major revenue increase, the company still saw a net loss of $14.05 million, which was slightly lower than the loss it saw on its revenue in 2013. Despite posting losses on its revenue in the last two years, the company is a leader in its space, one that has a strong demand, potentially causing the stock’s value to increase.
 
Lantheus (LNTH)
Also becoming available for trade on Thursday will be Lantheus, a developer of medical imaging products for the diagnosis of cardiovascular disease. The company plans to raise $75 million when it offers 7.9 million shares with a price range between $8.50 and $10.50. It will trade under the ticker LNTH.

In 2014, Lantheus saw revenues increase to $301.6 million, a 6.1% increase from the prior year. While the company was also able to decrease its operating expenses by 10.6% in 2014, it still suffered net losses of $3.6 million for the year. The company seems to be headed in the right direction though, as it posted a profit of $375,000 for the first quarter of 2015.

If the company can continue to obtain high revenues and lower expenses, in addition to building on its recent profitability increase, Lantheus could be a stock that becomes valuable and profitable for investors to hold onto moving forward.

Catabasis Pharmaceuticals (CATB)
The fourth healthcare IPO that will launch Thursday is that of Catabasis Pharmaceuticals, a developer of treatments for Duchenne muscular dystrophy and cardiovascular disease. The company is looking to raise $60 million, offering 4.3 million shares that will cost somewhere between $13 and $15 per share. Its shares will trade under the ticker CATB.

Catabasis has a diversified line of products which could lead to success for the company and future investors, but the company is pre-revenue and its loss from operations for 2014 were $21.9 million. The company could run out of cash before any of their drugs are ready for market, but if the company is able to get approval and begin marketing their products, its potential is substantial.

Seres Therapeutics (MCRB)
The largest of the healthcare IPOs for this week, Seres Therapeutics, will begin trading on Friday morning. The company plans to raise $100 million with the offering, which will include 6.35 million shares with a price target of $15 to $17 per share. It will trade under the ticker MCRB.

Seres Therapeutics, based in Cambridge, MA, is a developer of biological drugs for treating infections that are antibiotic resistant. The company is still pre-revenue, and saw loses of $7.9 million for the first quarter of 2015, which was much higher than losses of the same quarter in the previous year of $1.7 million. While the company is still in its drug development process, it could become a stock of interest in the future for investors once its products enter the market.
 
Moving Forward
All 5 of the above healthcare IPOs could turn into potential additions into investors’ portfolios; however, several are pre-revenue, and are dependent on research developments. Caution, then, is probably what should be used moving forward.  These stocks’ entrance to the market will be a point of interest in the coming days as each becomes publicly traded and the market is able to react.