Looks like it's time for fresh stock issues to take a little break. This week, only two issues of significant size are slated to hit the exchange, pharmaceutical concerns SCYNEXIS and Quotient. Investors will thus be able to catch their collective breath a little after the busy past two weeks, during which high-profile stocks Sabre, Weibo, and others came on the scene.
Those flotations were successful, but other stocks -- Ally Financial comes to mind, as does La Quinta Holdings -- either didn't rise significantly or have since dropped below their issue prices. This leads some to wonder whether the IPO market is sputtering. Given the number of companies still hoping to list on the exchange, that fear is probably overblown, although we should keep an eye on developments to see whether a trend emerges.
Before we look at this week's pair of picks, we need to issue a few words of caution. IPO investing carries above-average risk, since initial stock prices can be far from the value the market eventually puts on the company's shares. This situation provides immense upside potential, but it also opens the possibility of losing a big chunk of an investment.
Enough of the hand-wringing. Let's dig in.
SCYNEXIS wants to kill the bad stuff in your body. The company concentrates its efforts on anti-infective agents, with its lead product candidate (SCY-078) aimed at the more deadly varieties of invasive fungal infections. The firm says the drug has been effective in animal studies against a range of aggressive infections, which, promisingly, include drug-resistant strains. By the company's estimation, the global market for such products currently stands at roughly $3.6 billion, so it seems there's a strong customer base for it to profit from.
Just over 7.3 million shares of SCYNEXIS are slated to go on sale this week, although the exact day hasn't yet been set. The price per share is to be $7 to $8, and the company is being brought to market by lead underwriters Royal Bank of Canada's (NYSE:RY) RBC Capital Markets and Canaccord Genuity. The stock will be listed on the Nasdaq under the ticker symbol SCYX.
Transfusion diagnostics is this firm's specialty. In layman's terms, this means testing for blood grouping and blood plasma disorders. Quotient is new to the market, but its key subsidiary, Alba Biosciences, has been in business for more than 30 years. At the moment, Quotient's efforts are concentrated on MosaiQ, a technology platform that the company intends to be "the first commercially available, fully automated testing platform capable of simultaneously identifying all clinically significant blood-group antigens and antibodies in either donor or patient blood, eliminating manual testing."
Quotient stock will start trading on the Nasdaq this Tuesday under the ticker symbol QTNT. An even 5 million shares will hit the market, priced at $9 to $11 apiece. The underwriters are UBS (NYSE:UBS) Investment Bank, Baird, and Cowen Group's (NASDAQ:COWN) Cowen & Company.