Markets

Life Science Issuers Crowd the Best and Worst Performing Deals of Year

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The volatile biotech sector dominates the year’s top 40 best and worst performing growth equity private placement (EPP) deals, as investors prove the adage that a good hit will take you far – as well as its converse, that a miss can be devastating. Outside of life sciences companies, internet media and alternative energy companies rewarded investors while conventional energy and mining companies proved treacherous. Registered and unregistered EPPs by biotech, healthcare and pharmaceutical development companies comprise 46% of the best and worst performing deals by emerging growth companies in 2013, according to data compiled by Sagient Research and analyzed by Growth Capital Investor. (For the complete list of best and worst deals, see pages 12-13 of the current issue of Growth Capital Investor.)

Life science issuers closed 44 out of 80 combined best performing registered and unregistered private placements as of December 15. They also closed 30 of the 80 worst performing deals to date in 2013.

Markets
Biotech

Focus on IPOs Dents Life Science EPP Dollar Volume

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In a year shaping up to be known as “life science bulls gone wild,” a fervor that has fueled a gusher of initial public offerings and rising stock prices, publicly traded growth companies in the industry will end 2013 with fewer equity private placement dollars despite brisk deal making. Biotech and pharmaceutical companies raised $2.7 billion in 120 growth EPP transactions for an average of $22.5 million per deal through early December in 2013, according to PlacementTracker, a service of Sagient Research. That’s a substantial decrease from the $4.1 billion that the issuers raised in 134 placements for an average of $30.6 million in all of 2012. (Growth EPPs are offerings of a least $1 million of stock or equity-linked debt that feature fixed purchase, conversion and warrant exercise price terms. The data includes only growth companies that have market capitalizations from $10 million to $1 billion and a share price of at least $1 at closing.)

Follow-on offerings also have outpaced private placements: Biotech and pharmaceutical issuers have raised nearly $2 billion in 33 transactions this year versus $887 million in 16 deals in 2012, according to PlacementTracker. Yet biotech and pharmaceutical issuers continued to increase their use of at-the-market offerings in 2013, giving them more flexibility to raise cash in the coming months.

Markets
OTCQX

OTCQX Graduates Record Number of Companies to Exchanges

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OTC Markets reported that eight companies have graduated from the market’s QX listing level to U.S. exchanges this year, up sharply over the last three years. The latest up-list came last week, when Energy Fuels (UUUU) joined the NYSE MKT. The $104 million market cap uranium producer ended its first week of exchange trading up 1.8% on above average volume of 30,700 shares. Energy Fuels follows earlier up-listers Altisource Asset Management (AAMC), American Eagle Energy (AMZG), B2Gold (BTG), Empire Resources (ERS), LiqTech International (LIQT), Organovo Holdings (ONVO) and Tiptree Financial (TIPT).  That makes 2013 the best year for up-listings since the OTC created the upper tier in 2007.

Markets

Lesser-Known and Established Funds Differ on Ads

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Private funds received the same marketing freedoms as operating companies and startups when the Securities and Exchange Commission lifted the ban on general solicitation in September. But while small business proponents heralded the ban’s end as a transformative capital raising event, private funds have remained a bit more circumspect. A review of Form D submissions over the last several weeks indicates that while it’s not uncommon to see two or three fund filings each day declaring that sponsors have elected to use general solicitation by checking the Rule 506(c) box, most pooled investment funds continue to conduct offerings without the broad marketing option. Observers largely agree that emerging or lesser-known midlevel managers are most likely to market their offerings initially. At some point, however, large funds will begin to advertise in an effort to enhance their brand, they maintain.