As Total U.S. IPOs Mount, Several Biotech Deals Stumble

11/19/13Follow @bvbigelow

With less than six weeks remaining in 2013, the number of U.S. IPOs continues to mount at a rate unseen since the financial meltdown of 2008.

Ten companies are set to go public on U.S. markets this week, according to Renaissance Capital, the IPO investment firm based in Greenwich, CT. That includes Vital Therapies, a San Diego biotech that plans to raise about $75 million to help fund development of artificial liver technology for patients suffering from acute liver failure. (Three other IPOs pending this week are U.S.-based companies, including Vince, the high-end New York apparel designer, while six are foreign-based companies that chose to go public on U.S. markets.)

Demand for new offerings remains strong, even though three life sciences companies (San Diego-based Celladon; Monrovia, CA-based Xencor; and Palo Alto, CA-based CardioDx) postponed their IPOs last week. Another California biotech, Relypsa, raised $75 million last week by offering 6.9 million shares at $11, below the company’s expected price. For some IPO watchers, that’s enough to wonder if investor enthusiasm for biotech IPOs is beginning to wane.

“The IPO market has opened up in 2013 because IPO investors have been making money,” Renaissance co-founder Kathleen Shelton Smith wrote in an e-mail yesterday. And “not just those [institutional investors] that get IPO shares, but for investors who own these stocks in post-IPO trading.”

Smith said the Renaissance IPO ETF (Exchange Traded Fund), which tracks an index of newly public companies (which turn over after two years) is up 46 percent so far this year.

As of yesterday, Renaissance Capital reports that 203 U.S. companies have completed their IPOs in 2013, raising … Next Page »

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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