The biotech will carry about US$380m of
cash post-IPO, enough to fund through at
least the second half of 2020. In the
meantime, Orchard will seek FDA approvals
for drugs it acquired from GSK and
commercialise Strimvelis in Europe.
AMERICAS
UNITED STATES
ECM BANKERS BATTLE TOUGH
FINISH TO 2018
Three more IPOs raising a combined
53MûWILLûLOOKûTOûBRAVEûDIFlCULTû53û
equity capital market conditions in the
coming week, but few other equity issuers
are likely to wade into the market until
there is more stability.
The decline of the S&P 500 into correction
territory on Friday amid a fresh tech sell-off
and some disappointing earnings releases
further disrupted what until recently was
expected to be a busy period for issuance as
companies rushed to go public ahead of
midterm Congressional elections in early
November.
Only three IPOs of note (raising more
than US$50m each) were priced in the past
week. Of those, only StoneCo’s US$1.22bn
.ASDAQû)0/ûGENERATEDûSIGNIlCANTûBUZZ
Ice cooler maker Yeti stumbled on its
debut after pricing a downsized US$288m
NYSE IPO that was also priced below range.
Israel’s Gamida Cell (US$50m) managed
to stage its Nasdaq debut on Friday but only
after pricing it well below range.
The week ahead brings another three
IPOs, all of which are healthcare companies
led by a US$200m offering from London-
based biotech Orchard Rx being priced on
Tuesday night.
Axonics Modulation Technologies’
53MûmOATûWILLûONû7EDNESDAYûLOOKûTOû
continue the winning ways of the medical
devices sector, which has proved a resilient
source of alpha in the past month as biotech
IPOs have been more hit or miss.
After an elongated roadshow crossing two
weekends, biotech Twist Bioscience is
seeking to price an US$80m IPO on Tuesday.
At this stage, no IPOs of note are slated to
be priced in November.
Just a month ago, ECM participants had
pencilled in some big deals for this period,
including the multi-billion dollar debut of
Tencent Music Entertainment.
Bankers are now advising most issuers to
wait out the current volatility, though some
may look to push through and try to thread
narrow windows running from the elections
(November 6) to Thanksgiving (November
22) and from Thanksgiving to mid-
December when investors shut down for the
holidays.
"ANKERSûNOTEûTHEûlNALûWINDOWûOFûTHEûYEARûISû
a little wider than normal (about three weeks)
because Thanksgiving falls earlier than usually
(always the fourth Thursday of November).
But that may prove academic if markets
cannot get out of their current rut.
4HOUGHûAûNUMBERûOFûRECENTLYûlLEDû)0/Sû
are ready to be launched, the market sell-off
has disproportionately hit growth and small-
cap stocks that also make up the bulk of IPO
product.
Secondary activity was light in the past
week (with several smaller deals postponed),
both because of tough market conditions
and the heavy calendar of third-quarter
earnings releases.
Though investors are now through the
busiest week of the year, the coming weeks
will see plenty of big companies report and
at this stage conditions will not be
conducive to a large number of blocks,
overnight stock sales or marketed offerings.
The past week also saw water utility Aqua
America reveal it planned to raise
US$2.2bn–$2.5bn from an equity/equity-
linked offering to fund its US$4.3bn
acquisition of natural gas utility Peoples,
though the offering may not be priced until
next year.AXONICS RIDES MED DEVICE HOT STREAKSurgical implant maker AXONICS MODULATION
TECHNOLOGIES is looking to keep the winning
streak alive for medical device IPOs
following spine implant maker SI-Bone’s
recent strong debut.
VC-backed Axonics is looking to raise up
to US$106.7m in public funding for the
commercial launch of a potentially
disruptive treatment for urinary tract
disorders.Bank of America Merrill Lynch and Morgan
Stanley are marketing 6.67m shares at US$14-
$16 each for pricing post-close on October 31.
Existing shareholders have agreed to buy
US$45m of shares in the offering, much in
keeping with the sector trend.
The IPO is led by the same banking duo, in
reverse order, that took SI-Bone public in a
US$124m IPO that was both upsized and
priced at the high end of the range.
Axonics’ lead product is a rechargeable
implant that sends mild electronic pulses to
the sacral nerve as a means of controlling an
overactive bladder, faecal incontinence and
urinary retention.
The product has potential to replace
Medtronic’s InterStim II implant, which has
been the standard of care treatment for such
disorders for more than 20 years.
Medtronic’s implants are not
rechargeable and must be replaced every 4.4
years on average. Axonics implants have a
rechargeable battery that is designed to last
approximately 15 years.
A longer battery life means patients will
undergo fewer surgeries to replace their
implants. Axonics estimates that its product
could deliver up to US$12bn of savings for
healthcare payers over a 12-year period.
Axonics intends to seek pre-market
approval from the FDA for its implant in
patients with urinary urgency incontinence
DURINGûTHEûlRSTûQUARTERûOFûPROTEOSTASIS SLIPS ON EQUITY RAISEPROTEOSTASIS THERAPEUTICS ûTHEûCYSTICûlBROSISûDRUGû
DEVELOPER ûMAXIMISEDûTHEûlNANCIALûTAKEûFROMûAû
recent positive clinical trial, landing US$74m in
a follow-on stock sale on Tuesday and another
US$22m from earlier at-the-market stock sales.
The company boosted its cash reserves to
roughly US$125m, enough to fund
DEVELOPMENTûOFûITSûCYSTICûlBROSISûDRUGûINTOû
Phase III trials.
Volatile trading in the name continued, as
Proteostasis’ shares tanked 20.7% from offer
to US$5.35 (US$6.67 VWAP) on Wednesday.
Leerink Partners, Piper Jaffray and Cantor
Fitzgerald placed 11m shares at US$6.75, an
8.8% discount to last sale and an increase
from the 9m shares marketed for one day on
Tuesday, so there was no lack of takers.
Proteostasis agreed to turn off a US$50m
ATM programme that had seen it raise
US$21.7m at an average price of US$6.24.
Half of that programme was executed this
month at an average price of US$8.21.
The stock had closed at US$1.89 on
Wednesday October 17, the day before
Proteostasis read its interim Phase I trial data.
Proteostasis expects to report full trial
DATAûINûTHEûlRSTûQUARTERûOFûûANDûPOSSIBLYû
move straight into Phase III within the next
12–18 months.US EQUITIES
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 Morgan Stanley 134 19,987.29 13.2
2 JP Morgan 158 17,109.14 11.3
3 Goldman Sachs 118 17,065.41 11.2
4 Citigroup 112 13,836.91 9.1
5 BAML 116 11,458.00 7.5
6 Barclays 73 10,286.44 6.8
7 Credit Suisse 78 7,857.82 5.2
8 Wells Fargo 63 6,437.25 4.2
9 Jefferies 96 5,728.26 3.8
10 RBC 63 5,279.38 3.5
Total 681 151,808.68
Including all domestic and international deals and rights issues
Source: Refinitiv SDC code: C3r