Will “CBUS” and “SI” join “THOR” and “RMED”?
It’s next week or never (until 2019, that is) for two San Diego companies that have filed documents with securities regulators indicating plans to go public.
Agtech company Cibus, which uses “precision” gene editing to alter crops, has applied for a listing on the Nasdaq exchange under the stock symbol “CBUS.” Crypto-friendly Silvergate Bank has applied for a New York Stock Exchange (NYSE) listing under the stock symbol “SI.”
Each filed paperwork in November. Cibus set a preliminary target to raise $100 million in its IPO; Silvergate’s target is half that. Those numbers will change once the companies decide on the number of shares each will sell and the price per share.
However, even if the companies waiting in the wings decide to stay private until next year, San Diego will have had its best year for IPOs since the red-hot market of 2014. That year, eight San Diego companies joined the public markets, collectively raising about $520 million.
This year, seven local companies—six in life sciences and one in tech—have gone public in San Diego, collectively raising proceeds of about $427 million. That’s compared to three IPOs apiece last year and in 2016, which raised $345 million and $154 million, respectively, according to data from accounting firm Ernst & Young (EY).
Here are the seven San Diego companies that went public this year—and how they’ve performed since:
—One Stop Systems (NASDAQ: OSS): Ended first day of trading, Feb. 1, at $4.88 per share, closed Dec. 14 at $2.11, down 57 percent. (Comparatively, the S&P 500 was down 8 percent over the same period.)
—Bionano Genomics (NASDAQ: BNGO): Ended first day of trading, Sept. 21, at $6.99 per share, closed Dec. 14 at $6.45, down 8 percent. (Comparatively, the S&P 500 was down 12 percent.)
—Ra Medical Systems (NYSE: RMED): Ended first day of trading, Sept. 27, at $20 per share, closed Dec. 14 at $7.80, down 61 percent. (Comparatively, the S&P 500 was down 12 percent.)
—Equillium (NASDAQ: EQ): Ended first day of trading, Oct. 12, at $14 per share, closed Dec. 14 at $12, down 14 percent. (Comparatively, the S&P 500 was down 6 percent.)
—Eton Pharmaceuticals (NASDAQ: ETON): Ended first day of trading, Nov. 13, at $6.25 per share, closed Dec. 14 at $6.06 percent, down 3 percent. (Comparatively, the S&P 500 was down 4 percent.)
—Synthorx (NASDAQ: THOR): Ended first day of trading, Dec. 7, at $12.61 per share, closed Dec. 14 at $14.15, up 12 percent. (Comparatively, the S&P 500 was down 1 percent.)
The area’s increase in public market debuts this year mirrors a national trend: 205 companies went public on U.S. exchanges, up from 179 in 2017, according to the EY data. Companies this year raised nearly $53 billion, 30 percent more than roughly $40 billion in the year before.
Depending on when Cibus and Silvergate Capital hold their IPOs, 2018 could eclipse what Tim Holl, a partner in EY’s San Diego office, says was a frothy time for companies and investors four years ago.
“2014 was as hot of a market as we had seen in a long time,” Holl says.
This year, the heady stock market was again driven in part by IPO returns, he says: in the third quarter, for example, returns since IPO were at 30 percent. To date in the fourth quarter, thanks to the recent market volatility, returns are at about 10 percent, he says.
“It’s still higher than the Dow, so it’s still reflective of a nice investment class that you’re still seeing, at least currently, a willingness by the investors to invest in those earlier-stage companies with some room to grow,” Holl says. “If we start to look forward, if you go global and talk about rising U.S. interest rates, trade war with China, Brexit and some of those volatilities, that’s going to bear upon investors’ appetites for early-stage companies, but…there’s also a number of unicorns that have publicly announced that they’re going to try to get out.”
Among those companies are San Francisco’s Uber, Lyft, and Airbnb.
Holl says EY anticipates next year will bring fewer IPOs than 2018. Proceeds won’t necessarily be lower, but rather will be driven by how the unicorn companies perform, he says.