As the year quickly comes to an end, it would be interesting (and useful) to take a look at some of 2016’s best-performing IPOs so far.
And by the “best,” in this instance, I mean the companies that have had the highest returns since their public offerings.
Here are the top five IPOs with the highest returns…
Reata Pharmaceuticals (Return: 197%)
Reata Pharmaceuticals (NASDAQ: RETA) is a clinical-stage biopharmaceutical company that develops therapeutics for patients with serious or life-threatening diseases. It targets molecular pathways that regulate cellular energy production and inflammation.
On October 6, Reata announced that it had enrolled its first patient into the Phase 3 trial, Catalyst. The trial will evaluate the efficacy and safety of bardoxolone methyl in patients who have a connective tissue disease that’s associated with pulmonary arterial hypertension (CTD-PAH).
- Price at IPO: $11
- First Day Close: $13.70
- Current Price: $22.80
- Sector: Health care
- Offer Date: 5/26/2016
- Market Cap: $173.85 million
Clearside Biomedical (Return: 159%)
Clearside (NASDAQ: CLSD) is a biopharmaceutical company that develops drug therapies to treat chronic eye blinding diseases. Its current product focuses on diseases that specifically affect the retina and choroid.
It saw net proceeds of $51.4 million from its offer and a sale of 8,148,843 shares of common stock.
Cash and cash equivalents totaled $55.3 million as of June 30, 2016, compared to $20.3 million as of December 31, 2015.
Its product portfolio includes:
- CLS-1001, a treatment of macular edema that’s associated with non-infectious uveitis
- CLS-1003, a treatment of macular edema associated with retinal vein occlusion
- CLS-1002, a treatment of wet age-related macular degeneration
CEO and President Daniel H. White had this to say during a press release for second-quarter earnings:
The team at Clearside achieved some very important milestones in the second quarter of 2016 with the completion of our Phase 2 trial using Zuprata™ to treat macular edema associated with retinal vein occlusion, a retinal vascular disease, when given in combination with anti-VEGF therapy. Building on our Phase 2 trial using Zuprata to treat macular edema associated with non-infectious uveitis, we believe Zuprata will have multiple opportunities to treat blinding conditions associated with the back of the eye.
- Price at IPO: $7
- First Day Close: $7.25
- Current Price: $14.38
- Sector: Health care
- Offer Date: 6/2/2016
- Market Cap: $295.38 million
AveXis (Return: 140.05%)
AveXis (NASDAQ: AVXS) is a clinical-stage gene therapy company that develops novel treatments for patients who have rare and life-threatening neurological genetic diseases.
Its AVXS-101 is a treatment for spinal muscular atrophy (SMA), Type 1 SMA — Type 1 is the leading genetic cause of infant death.
On November 1st, the company announced a single-arm trial for its AVXS-101 treatment, which will be conducted alongside its ongoing Phase 1 trial.
The trial for the treatment is expected to start in the first half of 2017. The U.S. Food and Drug Administration (FDA) has shown interest and anticipation for the treatment.
Sean Nolan, President and CEO of AveXis, said:
We continue to be encouraged with this interim data for AVXS-101 and are eager to collaborate with the FDA via the breakthrough designation process to determine next steps in the development pathway for SMA Type 1, and we have submitted a Type B meeting request with the agency to facilitate this discussion.
- Price at IPO: $20
- First Day Close: $18.05
- Current Price: $60.15
- Sector: Health care
- Offer Date: 2/11/2016
- Market Cap: $1.34 billion
Acacia Communications (Return: 101%)
Acacia (NASDAQ: ACIA) aims to deliver high-speed coherent optical interconnect products that will transform communication networks through improvements in their performance, capacity, and cost.
Acacia is able to convert optical interconnect technology to a silicon-based technology, while still retaining simplicity and high performance in the most cost-effective way.
CFO of Acacia, John Gavin, said this:
We are delighted to have completed our IPO during the second quarter and are excited about the many opportunities ahead of us… The IPO enabled us to strengthen Acacia Communications’ balance sheet while providing substantial capacity to further grow the business.
The revenue for the second quarter in 2016 saw a 101% year-over-year increase — revenue of $116.2 million. In addition to that, it exceeded its earnings per share estimate of 0.3 in the second quarter — its actual earning per share in the second quarter was 0.77.
- Price at IPO: $23
- First Day Close: $29
- Current Price: $68.04
- Sector: Technology
- Offer Date: 5/13/2016
- Market Cap: $2.52 billion
Twilio Inc. (Return: 127%)
Twilio (NYSE: TWLO) provides a cloud communications platform that allows developers to build, scale, and operate communications within software applications through the cloud.
The software enables developers to embed voice, messaging, video, and authentication capabilities into applications. Some of Twilio’s customers include: Uber, Coca-Cola, Netflix, Airbnb, Twitter, and Hulu.
On October 20th, Twilio announced that it will be publicly offering its 7,000,000 shares of Class A common stock at a price of $40.00 per share, a secondary offering just a few months after its successful IPO in June.
This secondary offering played a huge role in the 47.55% decrease in stock prices in just one month. The secondary offering wasn’t there to provide any capital towards the company, and unfortunately made investors reluctant.
While Twilio has seen high returns since its IPO, investors should avoid this stock right now until it regains some stability.
- Price at IPO: $15
- First Day Close: $28.79
- Current Price: $33.93
- Sector: Technology
- Offer Date: 6/23/2016
- Market Cap: $2.88 billion
There’s not much left of this year, but so far in the third and fourth quarters, we’ve seen 54 companies go public.
And with the election looming very near, companies are hesitant to go public, especially when the market continues to experience its longest slide since 1980.
Regardless, the increase in the second half of the year brings a little more hope (and confidence) for a robust market in 2017.
Until next time,