The IPO Buzz: Slow Walk & The Fed After A Sizzling Week in Late July  

The IPO market is taking a slow summer walk this week. Just two tiny deals are on tap – plus the Fed’s July meeting, which started today – Tuesday, July 30, 2024. That summer break follows the fever dream of last week. IPO bankers raised almost $6 billion during the week of July 22, 2024,  to go into the IPO books as the busiest week of the year – and the highest dollar volume since last September. One deal – Lineage (LINE), a cold warehouse REIT – raked in $4.4 billion alone last week. Lineage was the largest IPO since Arm Holdings (ARM) last September.  Lineage defied the quiet – shall we say, nerdy? – track record of most REIT IPOs, which tend to trade close to their IPO prices. Lineage  delivered an opening-day pop to end its first day of trading (Thursday, July 25, 2024) up $2.78 from its vertigo-inducing IPO price of $78.00. IPO players point to last week’s sizzling pace – and Lineage in particular – as evidence of the pent-up demand for good deals. They see it as a positive sign for the IPO market’s prospects after Labor Day in September. Back to earth this week: Two tiny biotech deals are expected to price during the week of July 29, 2024. Only one has a firm pricing date, which happens to be tonight – Tuesday, July 30^th. (More on these in a moment.) Fed Watch The Fed is front and center on Wall Street’s radar this week. The FOMC began its two-day meeting at around 9 a.m. EDT today. That meeting will wrap up on Wednesday afternoon, July 31, 2024. All eyes will be on the Fed’s statement at 2 p.m. EDT on Wednesday for any hints about when the central bank will make its  first interest-rate cut after more than a year of raising rates to rein in inflation. The Street is hoping for a rate cut in September. The Fed is expected to keep its benchmark interest rate steady in the 5.25 percent to 5.50 percent range, where it has been since last July, according to Reuters. Friday’s mild reading for June on the PCE Index – the Fed’s preferred gauge of inflation – may move the Fed to change its description of inflation as “elevated,” Reuters reported.    Most on Wall Street now expect the first rate cut to come in September, Bloomberg reported: “While the Fed is expected to keep benchmark interest rates at the highest level in more than two decades this week, traders will be closely watching for any hints that the start of easing is near. Swap traders have fully priced in a quarter-point rate reduction in September and a total of about 64 basis points of reductions by year-end.” Light Summer Traffic Just two small biotech IPOs are on tap for pricing this week to raise a total of $34.6 million. The exceptionally light traffic is in sharp contrast to last week’s run of nine deals that raised nearly $6 billion. IPO pricings accounted for seven of last week’s nine deals; an uplisting deal and a small SPAC IPO also made it out the door. Let’s take a quick look at this week’s two deals: – Actuate Therapeutics (ACTU Proposed) is offering 2.95 million shares at a price range of $8.00 to $10.00 to raise $26.6 million. The IPO is expected to price during “the week of July 29, 2024.” This is a NASDAQ listing. The deal was upsized last week from 2.78 million shares. Titan Partners is the sole book-runner.  Newbridge Securities is the co-manager. Actuate Therapeutics, based in Fort Worth, Texas, is evaluating its lead drug candidate, elraglusib, as a weekly IV infusion – in combination with the chemotherapy GnP – to treat patients with metastatic pancreatic ductal adenocarcinoma (mPDAC) in a Phase II clinical trial, according to the prospectus. Results are expected in the first quarter of 2025. Elraglusib is an ATP competitive small molecule designed to enter cancer cells and block the function of the enzyme GSK-3-beta, which is involved in tumor cell survival, growth, migration and invasion. Actuate Therapeutics is not profitable, according to the prospectus – OS Therapies (OSTX Proposed) is offering 2.0 million shares at $4.00 to raise $8.0 million. The IPO is scheduled to price tonight – Tuesday, July 30, 2024 – to trade Wednesday, July 31, on the NYSE – American Exchange. Brookline Capital Markets is the sole book-runner. OS Therapies, based in Rockville, Maryland, is a Phase II clinical biotech focused on developing OST-Her2, its leading drug candidate, to treat osteosarcoma, an extremely rare and often aggressive cancer that mostly affects children, teenagers and young adults usually under the age of 40. There have not been any treatments approved by the FDA for osteosarcoma for more than 40 years. OST-HER2 is a genetically engineered strain of Listeria monocytogenes that causes the infection listeriosis, which expresses HER2 peptides. The FDA gave OST-HER2 orphan drug designation in the United States, the prospectus says. In July 2021, OS Therapies began a Phase IIb clinical trial of OST-HER2 to treat osteosarcoma in people at major hospitals in 18 states. The Phase IIb clinical trial is expected to be finished by late 2024. OS Therapies is not profitable, according to the prospectus. First Week of August Only one small IPO is on the pricing roster for August so far. zSpace (ZSPC Proposed) plans to price its $15.0 million IPO sometime during the week of Aug. 5, 2024. Roth Capital Partners and Craig-Hallum Capital Group are the joint book-runners. zSpace provides AR (augmented reality) and VR (virtual reality) Ed Tech solutions, the prospectus says. (Ed Tech is shorthand for educational technology.) Stay tuned. (For more information about these companies, please check the IPO Calendar and the individual IPO Profiles found on IPOScoop.com’s website.) Note: Never trade on proposed symbols. They have been known to change and you might buy something on the OTC Bulletin Board. To see what time the NASDAQ IPOs are expected to trade, please log in to: NASDAQTrader.com then scroll down to IPO Message. Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions. Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums) is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.