No. 6: Satsuma Pharmaceuticals Inc. (STSA)
Satsuma is a San Francisco-based pharmaceutical firm developing a dry-powder nasal spray to treat migraines. The product candidate — STS101 — can be quickly self-administered with a proprietary pre-filled, single-use, nasal delivery device. The company began a Phase 3 electronic medical records and genomics (eMERGE) trial for STS101 this past July and expects to report data in the second half of 2020.
Backed by private-equity giant TPG Capital, Satsuma is set for a $75 million deal by selling 5 million shares somewhere between $14 and $16 per share. If it prices at $15, the company would command a market cap of $262 million. Credit Suisse Group AG (CS), investment bank SVB Leerink, and Evercore Inc. (EVR) are underwriting the deal. Satsuma will trade under the ticker “STSA” on the Nasdaq.
No. 5: Alerus Financial Corp. (ALRS)
Founded in 1879, Alerus is a regional bank primarily servicing North Dakota, Minnesota, and Arizona. While Alerus offers typical banking, mortgage, and wealth management services in those three states, it provides retirement and benefit services to all 50 states. As of June, the firm has $2.2 billion of total assets, $27.9 billion of assets under administration, and $5.3 billion of assets under management. It also booked $183 million in revenue between June 2018 and June 2019.
Alerus is expected to generate $75 million through the sale of 3.25 million shares at a price range of $22 to $24, giving the company a market cap of $401 million at the midpoint. Raymond James Financial Inc. (RJF) and financial firm D.A. Davidson are the deal’s primary bookrunners. Alerus will list on the Nasdaq under the ticker “ALRS.”
No. 4: SpringWorks Therapeutics LLC (SWTX)
SpringWorks is a biotech currently developing a therapy for rare diseases and types of cancer. The company’s most advanced product candidate is nirogacestat for the treatment of desmoid tumors, which are debilitating and disfiguring soft tissue tumors for which there are currently no federally approved therapies on the market. SpringWorks licensed nirogacestat from Pfizer Inc. (PFE) back in 2017 and has since gotten it Fast Track Designation.
The company should raise $125 million by offering 7.35 million shares between $16 and $18 apiece for an expected market cap of $725 million at the range’s midpoint. The deal’s joint underwriters include JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), and the shares will trade on the Nasdaq under the ticker “SWTX.”
No. 3: 10x Genomics Inc. (TXG)
10x Genomics is a biotech founded in 2012 that designs and manufactures gene sequencing technology used for scientific research and clinical diagnostics. Since launching its first product in mid-2015 through June 30, 2019, the company has sold 1,284 instruments to researchers around the world, including 93 of the top 100 global research institutions by publications, and 13 of the top 15 global pharmaceutical companies by 2018 revenue. For the 12-month period ended June 30, 2019, 10x booked $197 million in sales.
The firm is set for a $297 million deal by selling 9 million shares between $31 and $35 each. That would give the company a $3.5 billion market cap if shares price at the $33 midpoint. JPMorgan and Goldman will once again be the deal’s main underwriters. 10x will list under the “TXG” ticker on the Nasdaq.
No. 2: Cloudflare Inc. (NET)
Cloudflare provides a state-of-the-art cloud platform for website security and web content optimization that enhances over 20 million internet properties. Despite rapid growth and high margins, the company faces several potential risks in the form of stiff competition, losses, and a shift to enterprise customers. However, the stock may benefit from an overall strong performance from software IPOs, which have average an exceptional 51% pop on the first day of trading.
Cloudflare plans to raise $385 million by offering 35 million shares at a price range of $10 to $12. At the midpoint of the proposed range, Cloudflare would command a market value of $3.5 billion. Goldman, Morgan Stanley (MS), JPMorgan are the main bookrunners on the deal. The company plans to list on the New York Stock Exchange (NYSE) under the symbol NET.
No. 1: SmileDirectClub (SDC)
The week’s biggest IPO is SmileDirectClub, a teledentistry company based in Nashville, Tennessee. SmileDirectClub is viewed as something of a disruptor to the orthodontics industry by producing 3D-printed clear aligners, which compete with traditional braces as well as clear alignment companies like Invisalign. The bold vision has paid off, as sales have rapidly grown to $622 million from June 2018 to June 2019 by offering clear teeth-straightening aligners that are more convenient and affordable than many existing options. Its direct-to-consumer model targets a massive global market, but the company is burning through cash, while competitors are joining the fray.
SmileDirectClub is expected to generate $1.2 billion by selling 58.5 million shares between $19 and $22. At the $20.50 midpoint, the firm would have a market cap of $8 billion. JPMorgan and Citigroup Inc. (C) are leading the deal, and the stock will list on the Nasdaq under the ticker “SDC.”
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