Wilson Sonsini Goodrich & Rosati is pleased to present its 2016 Technology and Life Sciences IPO Report, which presents key data related to the pricing of 49 U.S.-based technology and life sciences issuers between January 1 and December 1, 2016.
In a year of uncertainty in the domestic and international financial markets, the U.S. market for new issuers recovered from a halting start to post a solid second half.
For technology IPOs, 2016 was a tale of two halves. The first half of 2016 picked up where the second half of 2015 left off. The second half of 2015 saw 10 technology deals price—the lowest number in any six-month period since 2009. A turbulent worldwide economic environment essentially cut off technology IPOs, and only three deals priced in the first half of 2016. In contrast, the second half of 2016 saw 12 technology IPOs price—a return to the pace of the past three years.
The difficult pricing environment of the second half of 2015 improved slightly in 2016. In the last six months of 2015, 28 percent of technology IPOs priced below their expected range, compared to 17 percent in the first half of the year. In 2016, only 13 percent of technology IPOs priced below their expected range.
While the year saw strong entrants such as Twilio and Nutanix, it remained challenging for technology IPOs overall.
The number of life sciences IPOs exceeded the number of technology IPOs for the fourth consecutive year. Though 2016 failed to match the heady new-issue market for life sciences companies of the previous two years, 34 such companies priced initial offerings, compared to 47 in 2015.
Despite the higher deal count, market reception for the life sciences companies in our survey trailed the reception for technology entrants to the market.
Forty-one percent of life sciences companies priced below their expected range. In addition, while 67 percent of technology companies traded up on their first day, only 56 percent of life sciences IPOs traded up on their initial day.
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