Stirling Strategic: The Best and Worst IPOs 2017

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The initial public offering market is back from its summer break and the new issues calendar is filling up.

This week eased in slowly with Tremont Mortgage Trust (TRMT), a new REIT to be run by RMR Group, raised $50 million, compared with the $90 million. The stock, which priced at $20, broke and closed at $17.29.

And Social Capital Hedosophia (IPOA.U), a special purpose acquisition company (SPAC), raised $600 million to be used to combine with a company yet to be named. It’s getting a little more attention being called a “blank check” company and it’s founded by a Facebook (FB) alumnus.

But as we approach the home stretch of 2017, it’s a good time to look at the big winners and losers that debuted so far.

First are the winners, where health dominates.

Top Gainers

1. Calyxt (CLXT): Up 251%

Healthier eating through gene editing is what Calyxt is all about. That’s things like cold storage potatoes and herbicide tolerant wheat. The company was spun off from Cellectis, based in France.

It raised $56 million, pricing 7 million shares at $8 per share. That was a lot lower than the $100 million it hoped to raise, but it enjoyed a strong debut, closing at $11.25 per share.

The stock’s been on a tear since the last day of August and is now trading around $28.33. It’s up more than 7% today on little solid news. That’s momentum, folks.

Since its inception on July 5, recommended stocks by Stirling Strategic Investor have returned 6.62% by Sept. 11 vs. the S&P return of 3.32%.

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2. Akcea Therapeutics (AKCA): Up 195%

Biotech Akcea started as a subsidiary of Ionis Pharmaceuticals (IONS) and went public on July 14. It specializes in treatment of diseases caused by lipid disorders.

While it cut its share offering to $8 per share from an expected range of $12 to $14, it still raised the expected $124.8 million by selling more shares.

Shares are now trading at $23.75.

3. UroGen Pharma (URGN): Up 143%

Israeli biotech UroGen Pharma is developing a urothelial cancer treatment as well as other drugs for urological diseases.

The company had strong demand from its pricing and hasn’t looked back. It began trading May 4.

UroGen Pharma priced at $13 per share, but sold 4.47 million shares rather than the originally anticipated $3.46. It raised about $58 million rather about $45 million.

Shares are trading around $31.58.

4. Biohaven Pharmaceutical (BHVN): Up 123%

Biotech Biohaven Pharma joined UroGen in trading first day on May 4 and just trails UroGen for best performance so far this year.

Biohaven develops treatments for migraines and other neurological problems (insert your own Wall Street headache pun here).

The company originally planned to raise $148.5 million, based on range midpoint of $15 per share. But it raised $168.3 million after seeing enough demand to price at $17.

It’s now around $37.85.

5. Appian (APPN): Up 120%

It’s a tight race for fifth place; so tight there may be a new name in the slot soon after publishing. But it’s hard to deny that Appian has be the new tech darling.

Custom business applications company Appian priced 6.3 million shares at $12, right in the middle of its range, raising $75.6 million. It started trading on May 25.

The company started up in 1999, the heyday of the dot-com boom, and finally made it to the market 18 years later.

Shares of Appian are now around $26.37.

Following closely behind Appian for fifth place is AnaptysBio (ANAB), up 113.4% ,and Smart Global Holdings (SGH), up 109%.

Biggest Losers

1. ObsEva (OBSV): Down 53%

Biotechs win big and lose big. And ObsEva, a Swedish biotech that is working on treatments for women’s reproductive health, has lost the most since it started trading.

The deal looked good at the beginning. The company raised $96 million, pricing 6.5 million shares at $15 per share, in the midpoint of the range. But since trading on Jan. 25 it’s been struggling and now trades around $7 a share.

Only four analysts cover the company and overall they like the stock, but on average ObsEva is expected to keep all of 2018 losing a substantial amount of money, as it has this year.

2. Ramaco Resources (METC): Down 47.4%

The revitalization of the coal industry could still occur, but Ramaco Resources hasn’t been a beneficiary. The company sells metallurgic coal mined from Northern Appalachian region.

The company faced some resistance to a new mine in Wyoming. It also posted a net loss of 9 cents per share for the second quarter ended June 30, three times wider than the loss in its year-ago period.

The company raised $81 million, pricing 6 million shares at the midpoint of $13.50 per share. Shares are now around $7.10.

3. Blue Apron (APRN): Down 43.5%

Blue Apron is the most recognizable name on the list and for shareholders the most disappointing (Snapchat (SNAP) is down nearly 12% in comparison.)

The company started out on a bad foot, pricing 30 million shares at $10 per share. That was below the its original range of $15 to $17. It still raised $300 million, but was expecting $480 million.

Analysts are still, on average, expecting a large loss for 2018. There have been lots of recent downgrades of shares and class action lawsuits from disgruntled investors. Turnaround looks like a long time.

4. ZymeWorks (ZYME): Down 41%

Back on the biotech train with ZymeWorks, a Canadian company that is working on drugs for breast cancer.

Sell-side research has been bearish on the prospects of the clinical results of its lead potential treatment.

The company raised $59 million selling 4.5 million shares at $13 a share, the low end of a rather wide $13 to $16 range.

Shares are now trading at about $7.72.

5. Ovid Therapeutics (OVID): Down 36.7%

It’s probably fitting to end with a biotech company. Ovid works on treatments for neurological disorders.

Ovid raised $75 million by pricing 5 million shares at $15 per share, the low end of its range.

The company struggled down below $13 on its first day of trading.

Right now it is trading around $9.57.

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