US Weekly IPO and SPAC Monitor: Gene editing Biotech Prime Medicine and Molybdenum Enricher Aerodynamic Separation Process

We are seeing a little activity in IPO land. A few deals are scheduled to price in the week ahead, and many still on the back burner. Gene editing biotech Prime Medicine (PRME) would be the first sizable IPO of the fourth quarter. Aerodynamic Separation Process (ASP) focusing on the commercialization of enriched Molybdenum-100 plans to list. Three holdovers from the past week are scheduled to price; Beamr Imaging (BMR), Intensity Therapeutics (INTS) and Alopexx (ALPX). Intel’s Mobileye (MBLY) will be eligible to launch its IPO and could join the calendar in the week ahead.

Prime Medicine

Last week was another quiet week as expected for IPOs as the drought continues to worsen along with global liquidity. Three SPACs however and one micro-cap began trading this past week. Two small IPOs submitted initial filings. Fund managers, investors and deal makers are obviously reluctant to wade into new IPOs. The week’s blank check IPOs were Spring Valley Acquisition II (SVIIU), Hudson Acquisition (HUDAU) and TenX Keane Acquisition (TENKU). Tech services provider Castellum (CTM) priced its NYSE American uplisting at the low end of the downwardly revised range.

US IPO Week Ahead

via Renaissance Capital

Prime Medicine (PRME)

Prime Medicine plans to raise $151 million at a $1.7 billion market cap. PRME is developing one-time curative genetic therapies using Prime Editing technology, which it believes its more accurate and versatile than other types of gene editing. Prime currently has a pipeline of 18 preclinical programs targeting various indications, though it has no clinical data available and doesn’t expect to file its first IND until 2024.

They in-license their Prime Editing technology pursuant to a license agreement with the Broad Institute, Inc., or Broad Institute.

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

ASP Isotopes (ASPI)

ASP Isotopes (ASPI) plans to raise $12 million at a $205 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.

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

Intensity Therapeutics (INTS)

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.

Possible Pricing from IPOs from Past Weeks

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: No IPO Week

Another quiet week as IPO continue to dry up in this risk off market. The week’s blank check IPOs were Spring Valley Acquisition II (SVIIU), the second SPAC formed by Pearl Energy Investment Management, which raised $200 million to target the sustainability industry. Hudson Acquisition (HUDAU) raised $60 million to target the technology sector in the US, and TenX Keane Acquisition (TENKU) raised $60 million to target businesses in Asia. Tech services provider Castellum (CTM) priced its NYSE American uplisting at the low end of the downwardly revised range to raise $3 million at an $89 million market cap.

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%.

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.

IPO Week Recap

Castellum (CTM)

OTC-listed Castellum (CTM) priced its NYSE American uplisting at the low end of the downwardly revised range to raise $3 million at an $89 million market cap. It had planned to raise $13 million at a $234 million market cap. Fast growing and unprofitable, the company acquires and grows tech companies to provide intelligence analysis, software development, and other services, primarily to US government agencies and departments. The Company has developed a qualified business opportunity pipeline of over $400 million (the “Opportunity Pipeline”).

  • Underwriters: EF Hutton
  • Headquarters Bethesda, MD
  • Founded 2010
  • Employees 213
  • Website: www.castellumus.com

Castellum Closed Down 34%

“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