The U.S. market for initial public offerings hit its lowest mark during the 1st quarter since the financial crisis hit in 2008 and 2009 and every flotation was for a healthcare company, according to a report from Renaissance Capital.
Eight IPOs raised a collective $700 million during the quarter, but were only viable due to substantial buys from existing shareholders, according to the report.
Average insider support reached more than 22% in 2015 and soared to more than 40% during Q1 2016. Of the 8 deals, the sole medical device company – Senseonics – is still in the development phase. A pair of biotechs that floated during the quarter are not yet in clinical trials and 3 others are still in Phase I, according to the report.
Another 8 companies postponed their offerings during the quarter, following 9 tabled IPOs during the same period in 2015. The aggregate proposed raise of $1.4 billion would have doubled the actual raise during the just-concluded period, according to the report.
“We believe most of these companies could have completed IPOs had they been willing to take significant discounts (as much as 50% in some cases) to their proposed valuations,” Renaissance Capital wrote.