The IPO Buzz: Eliem Therapeutics & Two Small Banks

Eliem Therapeutics (ELYM proposed) trimmed its IPO’s terms this morning for pricing tonight. This IPO, a carry-over from last week, and two small bank deals make up this week’s IPO Calendar so far. It’s a sign that the IPO market is winding down for the traditional August break after July’s red-hot pace. IPO professionals say it’s time to step back after the postponement of several deals in the past two weeks.

Four IPOs were postponed last week, while three IPOs were postponed during the week of July 26.

“There’s a message there,” a seasoned IPO pro says. “The valuations are off, for one thing. When you see this happening, the IPO window normally closes for a week or two.”

Disappointment roiled the IPO market last week when most retail investors did not get stock in Weber, Inc.’s (WEBR) IPO, after the number of shares was cut drastically and the IPO was priced well below range. Shares of Weber popped on the iconic grill brand’s first day of trading as a public company.

The traditional summer slowdown in the IPO market usually runs from mid-August until Labor Day – or perhaps the week after that holiday. A year ago, bankers did not stop. Instead, the pace seemed to pick up in August and accelerated again in mid-September. That set the stage for 2020 going down in IPO history as a record year – until this year, that is.

“I’m ready for a break,” a veteran IPO trader says.

All told, bankers expect to raise $172.8 million from the three IPOs on tap so far to price during the week of Aug. 9. Let’s take a look.

Biotech IPO Pricing Tonight

Eliem Therapeutics  (ELYM proposed) expects to price its revised IPO Monday night – to start trading Tuesday on the NASDAQ. The clinical biotech’s small-cap IPO was revised Monday morning with an increase in the number of shares – to 6 million, up from 4.5 million initially – while the price was cut to $12.50, down from its initial range of $17 to $19. (The IPO had been scheduled for pricing on Thursday night, Aug. 5, 2021.)

The revamped IPO would raise $75 million, down from $81 million, the estimated proceeds of its initial terms at mid-point pricing.

SVB Leerink, Evercore ISI, Stifel and Guggenheim Securities are the joint book-runners.

Eliem Therapeutics, based in Redmond, Washington, has two lead clinical-stage drug candidates:

• ETX-810 to treat the chronic pain of two conditions – diabetic peripheral neuropathy and sciatica – in two Phase 2a clinical trials expected to report topline data in the first half of 2022.
• ETX-155 to treat major depression, peri-menopausal depression and photosensitive epilepsy (by targeting focal onset seizures, the most common type of seizures experienced by people with epilepsy) – The company plans to start two Phase 2a clinical trials for this drug as an anti-depressive treatment, with topline data expected in the first half of 2023. Eliem also plans to start a Phase 1b clinical trial in patients with photosensitive epilepsy with topline data expected in the first half of 2022.

 Bank IPOs Pricing Wednesday Night

 A Utah-based digital banking company and a traditional Alabama-based community bank are scheduled to price their IPOs on Wednesday night. Both companies expect their stock to start trading Thursday on the NASDAQ.

FinWise Bancorp (FINW proposed) is headquartered in Sandy, Utah, north of Salt Lake City. The bank holding company’s subsidiary, FinWise Bank, markets itself as a digital community bank. FinWise Bank is one of the most active Small Business Administration lenders, according to the SBA’s website. The bank, however, has been the subject of consumer groups’ protests for its consumer loans – in partnership with Opportunity Financial, a non-bank lender – to individuals at interest rates ranging from 8 percent to 160 percent.

Worth noting: Utah’s payday loan rates are 2nd highest in America. Only Texas is higher. (sltrib.com)

This is an IPO of 4.13 million shares at $13 to $15. If priced at the mid-point, FinWise Bancorp’s IPO would raise $57.8 million.

Piper Sandler is the sole book-runner. Stephens, Inc. is the co-manager.

Southern States Bancshares, Inc. (SSBK proposed) is a bank holding company based in Anniston, Alabama. Its flagship subsidiary, Southern States Bank, provides community banking services from 15 offices in Alabama and Georgia.

This is an IPO of only 2 million shares at $19 to $21. The deal would raise $40 million, if priced at the mid-point.

Keefe, Bruyette & Woods and Truist Securities are the joint book-runners.

Worth noting: Of the 2 million shares in the IPO, Southern States Bancshares is offering 996,429 shares and the selling stockholders are offering another 1,003,571 shares.

Week of Aug. 16

The IPO Calendar is blank for the third week of August. That could change, of course, as filings continue to slip through the U.S. Securities and Exchange Commission’s filing window.  But some IPO pros believe that the market is hinting that it will take its August break this year.

Stay tuned.

(For more information, please check the IPO Calendar and click on a company’s name, which will take you to the IPO Profile and a link to the prospectus.)

(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)

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.