US Weekly IPO and SPAC Monitor: BullFrog AI and Acrivon Therapeutics

There is just one small deal scheduled to price, Nano-cap BullFrog AI Holdings (BFAI) is developing an analytical AI/ML platform for drug development. Precision oncology biotech Acrivon Therapeutics (ACRV) may also price, after delaying its $100 million IPO. Last week we were surprised by holdover IPOs and one, Intensity Therapeutics (INTS) postponed. There is a chance some micro-caps may IPO they have been looking to price on a “day-to-day” basis as brokers look to shift deals in the pipeline to investors with the stock market surge this week. Large IPOs MN8 Energy (MNX), KinderCare (KLC), and Savers Value Village (SVV) all filed updates this past week.

Bullfrog AI

Last week we had Three IPOs and one SPAC begin trading, though neither of the scheduled biotechs made it to market as Intensity Therapeutics (INTS) postponed and Acrivon Therapeutics (ACRV) delayed its pricing. Chinese hotel chain Atour Lifestyle Holdings (ATAT), Online game developer and publisher Snail (SNAL) and holdover ASP Isotopes (ASPI) all priced at the mid-price or low end. The sole SPAC to price was Plutonian Acquisition (PLTNU).

In the pipeline, large IPOs KinderCare Learning Companies (KLC), Savers Value Village (SVV), and MN8 Energy (MNX) all filed updates during the week, perhaps we could still see another major IPO before year-end. A feature of the IPO market this year is the many names coming up for pricing and being delayed.

US IPO Week Ahead

BullFrog AI Holdings (BFAI)

BullFrog AI Holdings (BFAI) plans to raise $8 million at a $34 million market cap. The pre-revenue company is developing an analytical AI/ML platform called bfLEAP to “transform the field of precision medicine. Our mission is to apply predictive analytics to all stages of drug development to improve the lives of every patient.”

“BullFrog AI consists of an exceptional team of life science industry leaders, AI technologists, scientists, physicians and advisors determined to revolutionize drug development. And through our partnership with one of the most prestigious research institutions in the world, Johns Hopkins, we are at the forefront of AI technology development.”

  • Underwriters: Roth Capital, The Benchmark Company
  • Headquarters: Gaithersburg, MD
  • Founded: 2017
  • Employees 4
  • Website: Bullfrog AI

Acrivon Therapeutics (ACRV)

Precision oncology biotech Acrivon Therapeutics (ACRV) plans to raise $100 million at a $351 million market cap. The company’s lead candidate is in a potentially registrational Phase 2 trial across multiple tumor types, focusing on platinum-resistant ovarian, endometrial, and bladder cancers, with initial readouts expected in the 2H23. Their AP3 platform enables the creation of drug specific proprietary OncoSignature companion diagnostics that are used to identify the patients most likely to benefit from our drug candidates, which we refer to as patient responders.

Acrivon Therapeutics
  • Underwriters: Roth Capital, The Benchmark Company
  • Headquarters: Watertown, MA
  • Founded: 2018
  • Employees 42
  • Website: Home – Acrivon

Possible Pricing of IPOs from Past Weeks

Beamr (BMR)

Beamr

Beamr (BMR), an Israeli video encoding and image optimization software provider, plans to raise $15 million at a $73 million market cap. The company currently licenses three core video and image compression and counts streaming platforms and Hollywood studios among its clients. At the heart of their patented optimization technology is the proprietary Beamr Quality Measure, or BQM, that is highly correlated with the human visual system. BQM is integrated into their Content Adaptive Bitrate, or CABR, system, which maximizes quality and remove visual redundancies resulting in a smaller file size.

However, Beamr is small and unprofitable, and saw revenue decline in the 1H22.

  • Underwriters: ThinkEquity
  • Headquarters Herzeliya, Israel
  • Founded 2009
  • Employees 28
  • Website: www.beamr.com

Alopexx (ALPX)

Alopexx (ALPX) plans to raise $15 million at a $39 million market cap. The company is a clinical stage biotechnology company developing novel immune therapeutics for the prevention, treatment and mitigation of bacterial, fungal, and parasitic infections that express the antigenic target poly N-acetyl glucosamine (PNAG). That target has been found on an expanding number of pathogens. In a first-in-man trial, their vaccine candidate, AV0328, has been shown to be well tolerated with no serious adverse events observed.

  • Underwriters: ThinkEquity
  • Headquarters Cambridge, MA
  • Founded 2006
  • Employees 3
  • Website: www.alopexx.com

Lead Real Estate (LRE)

Japanese luxury real estate developer Lead Real Estate (LRE) plans to raise $27 million at a $196 million market cap. Growing developer of luxury residential properties, including single-family homes and condominiums, across Tokyo and Kanagawa prefecture. In addition, they operate hotels in Tokyo and lease apartment building units to individual customers in Japan and Dallas, Texas. Primarily generate revenue from developing and selling single-family homes and condominiums. Since inception in 2001, have delivered more than 1,000 single-family homes and 25 condominiums.

YanGuFang Group (JUNS)

YanGuFang Group (YGF), a Chinese producer of oat and grain products, plans to raise $30 million at a $210 million market cap. Note that YanGuFang Group is a holding company incorporated as an exempted company on May 28, 2020 under the laws of the Cayman Islands. As a holding company with no material operations of its own, it conducts substantially all of its operations through its subsidiary and the VIEs in China. YGF is primarily engaged in the production, research and development, and sales of oat and grain products through our direct salesforce and distribution network.

Jupiter Neurosciences (JUNS)

Jupiter Neurosciences (JUNS) plans to raise $15 million at a $62 million market cap. Jupiter’s sole candidate, JOTROL, is being developed for various neuro and rare disease indications. JOTROL completed a Phase 1 safety and tolerability trial in March 2021 and is expected to commence Phase 2 trials in the 4Q22.

Jupiter Neurosciences

The Company has developed a unique resveratrol platform product primarily targeting treatment of neuro-inflammation. The product candidate, called JOTROL™, has many potential indications of use for rare diseases, which of we primarily are targeting Mucopolysaccharidoses Type 1, Friedreich’s Ataxia, and MELAS and with ALS in an earlier development stage. In the larger disease areas, we are primarily targeting Mild Cognitive Impairment/early Alzheimer’s disease with an early development program in TBI/concussions.

Alopexx (ALPX)

Infectious disease biotech Alopexx (ALPX) plans to raise $15 million. A clinical stage biotechnology company developing novel immune therapeutics for the prevention, treatment and mitigation of bacterial, fungal, and parasitic infections that express the antigenic target poly N-acetyl glucosamine (PNAG). That target has been found on an expanding number of pathogens.

In a first-in-man trial vaccine candidate, AV0328, has been shown to be well tolerated with no serious adverse events observed. It was noted to induce protective antibodies against all PNAG-expressing pathogens tested. Similarly, fully human monoclonal antibody, F598, that also targets PNAG, has been shown to be well tolerated and no serious adverse events were noted in phase 1 and pilot phase 2 trials.

Seek to establish F598 as the standard of care for preventing and ameliorating gram-negative and gram-positive bacterial infections along with fungal infections by organisms that express PNAG in patients admitted to intensive care units (ICU).

  • Underwriters: ThinkEquity
  • Headquarters Cambridge, MA
  • Founded 2006
  • Employees 3
  • Website: Alopexx (ALPX)

Lichen China (LICN) (Possible was expected last week)

China-based Lichen China (LICN) is expected to raise $25 million on Friday and begin trading on Monday, the company is a leading financial and taxation service provider in China in terms of revenue, according to the industry report of Frost & Sullivan. Have operated as a dedicated financial and taxation solution service specialist in China for over 17 years. Operate in the PRC under the “Lichen” brand. New business line of software and maintenance services in 2019 to expand software product offerings to enterprise customers, universities, colleges and educational institutes and have started to generate revenue from provision of such services since then.

US IPO Weekly Recap: Three IPO, One SPAC Week

Last week we had Three IPOs and one SPAC begin trading, though neither of the scheduled biotechs made it to market as Intensity Therapeutics (INTS) postponed and Acrivon Therapeutics (ACRV) delayed its pricing. Chinese hotel chain Atour Lifestyle Holdings (ATAT), Online game developer and publisher Snail (SNAL) and holdover ASP Isotopes (ASPI) all priced at the mid-price or low end. The one SPAC to price, Plutonian Acquisition (PLTNU) raised $50 million to target metaverse tech, tourism, and e-commerce in the Asia-Pacific region.

In the pipeline, large IPOs KinderCare Learning Companies (KLC), Savers Value Village (SVV), and MN8 Energy (MNX) all filed updates during the week, perhaps we could still see another major IPO before year-end. A feature of the IPO market this year is the many names coming up for pricing and being delayed.

Issuers not included is because the company offered units with warrants attached and priced at a market cap less than $50 million, they will be excluded from Renaissance Capital’s 2022 IPO stats.

ASP Isotopes (ASPI)

ASP Isotopes (ASPI) has been a holdover from a number of weeks and planned to raise $12 million at a $205 million market cap. The company downsized and priced at the low end of the downwardly revised range to raise $5 million at a $131 million market cap. The pre-commercial stage company has an exclusive license for the Aerodynamic Separation Process (ASP) of isotope enrichment and will initially focus on the production and commercialization of enriched Molybdenum-100 (“Mo-100”). Klydon has agreed to provide us a first commercial-scale Mo-100 enrichment plant located in South Africa with a manufacturing capacity of 20 kg/year of 95% enriched Mo-100 when fully operational. ASP Isotopes has a limited operating history and has yet to generate revenues.

Snail Closed Down 30%

Atour Lifestyle Holdings (ATAT)

Chinese hotel chain Atour Lifestyle Holdings (ATAT) priced at the low end to raise $52 million at a $1.5 billion market cap. The company franchises and manages a portfolio of upper midscale hotels aimed at young, affluent consumers. It has remained profitable despite COVID-related headwinds in China, which have been and are expected to remain unpredictable.

They have their ‘‘A-Card’’ loyalty program with strong customer stickiness. They built their A-Card loyalty program to enhance engagement with guests and provide them with a unique and personalized experience. As of June 30, 2022, our A-Card loyalty program had amassed 32 million registered individual members.

Snail Closed Up 17%

Snail (SNAL)

ARK: Survival Evolved

Snail, a developer and publisher of online multiplayer games for various platforms, including consoles, PCs and mobile devices raised $15 million. The company offered 3 million shares at $5, within the range of $4 to $6. The company originally planned to offer 5 million shares at a range of $5 to $7 before lowering the terms last month.

For four of the last six years ended December 2021, most recently in 2020, ARK: Survival Evolved was a top-25 seller on the Steam platform across all game genres. Their flagship franchise from which they generate the substantial majority of revenues is ARK: Survival Evolved, a leader within the sandbox survival genre with over 76.5 million console and PC installs, which include 38.4 million installs from free promotions, through June 30, 2022.

In the six months ended June 30, 2022, ARK: Survival Evolved averaged a total of 395,150 daily active users (“DAUs”) on the Steam and Epic platforms, and Snail experienced a peak of approximately 755,000 DAUs in June 2020. For the years ended December 31, 2021, 2020 and 2019, Snail generated 90.7%, 89.5% and 80.5%, respectively, of revenues from ARK: Survival Evolved.

  • Underwriters: Roth Capital, The Benchmark Company
  • Headquarters: Culver City, CA
  • Founded: 2009
  • Employees 65
  • Website: Snail Games USA

On Friday after just floating the day before Snail, announced the company’s board of directors approved up to $5 million worth of common stock buybacks. The announcement appeared to be response to the disastrous IPO priced at $5 went to $1.64 on the first day. Its two-day range was $1.64 – 4.36, the high today on the buyback reaction, closing at $3.00 +0.75 or 33.33% on the day but still down $2 on the IPO price.

Snail Closed Down 40%

Intensity Therapeutics (INTS) Postponed their IPO

Intensity Therapeutics

Oncology biotech Intensity Therapeutics (INTS) plans to raise $10 million at an $82 million market cap. Intensity Therapeutics, Inc. is a clinical stage biotechnology company passionately committed to applying scientific leadership in the field of localized cancer reduction leading to anti-cancer immune activation.

Their approach involves the direct injection into tumors of a unique product created from their DfuseRx discovery platform. One challenge they have identified with current intratumoral (IT) treatment approaches is that a tumor’s lipophilic, high fat and pressurized microenvironment does not effectively absorb water-based products. Evidence shows the mechanism of tumor killing achieved by their drug candidate also leads to systemic immune activation in certain cancers.

Filings Monitor

IPO Week Recap

Dealogic Reports show around 87% of companies that went public in the U.S. last year are trading below their offering prices, down more than 49% on average as of last Friday’s close. The S&P 500 is down 23% this year, while the tech-heavy Nasdaq Composite has fallen 31%.

“The IPO market is on pace for its worst year in decades, leaving fledgling companies with few options but to burn through cash while they wait for the stock market to calm. Late last year, hundreds of companies were in the final stages of preparing to go public, encouraged by the best 18 months ever for U.S. initial public offerings. Then a combination of factors—sky-high inflation, rising interest rates and Russia’s invasion of Ukraine—sent shock waves through the stock market. The IPO pipeline froze. So far this year, traditional IPOs have raised only $5.1 billion all told, Dealogic data show. Typically at this point in the year, traditional IPOs have raised around $33 billion… Last year at this point, these offerings raised more than $100 billion.”

August 22 – Wall Street Journal (By Corrie Driebusch)
US IPO Issuance in August Highest For 2022

Warrants to Entice New Issuance

Over the last month, a rising number of small deals have opted to offer warrants in their IPOs, either at the time of the initial filing or in a later amendment. In the context of an IPO, warrants give investors the right to purchase a new issuer’s stock at a specific price within a set time frame. That price is usually equal to or slightly greater than the offer price, and the time frame is often within five years after the IPO.

Warrants allow new issuers to both sweeten the pot for investors and provide an additional source of capital for themselves.

While offering warrants may help small deals get done in challenging conditions, it does not provide immunity from poor trading. From 2021 to date, issuers that have gone public after adding warrants are mostly underwater, averaging a -54% return from IPO.

Recent filers that have opted to offer warrants are all micro-caps and span a variety of industries. The group includes both companies filing for fresh listings, as well as those hoping to uplist from the OTC. Non-listed filers feature ramen restaurant chain Yoshiharu Global, Canadian psychotropics company Lucy Scientific Discovery, aquaculture company The tru Shrimp Companies, short-term rental provider CorpHousing Group, and agtech developer Opti-Harvest.

Source: Completely warranted: Small IPOs are enhancing their deals with warrants – Renaissance Capital

From The TradersCommunity Research Desk