The U.S. IPO market has been literally frozen in 2022 and Excelerate Energy is the only major company that has gone public in the year through the traditional IPO route. However, there have been some small IPOs. Akanda, Genius Group, and Yoshitsu are among the smaller companies that have gone public in 2022. Preclinical biotech company Ocean Biomedical is expected to list this week under the ticker symbol “OCEA.”
The company filed for an IPO in 2021 but revised the terms multiple times. What’s the IPO date and price for Ocean Biomedical and is the IPO a good buy?
Small IPOs have given strong listing gains.
While the mega listings of 2021, including Robinhood, Rivian, and Coinbase have sagged, the smaller IPOs of 2022 have given stellar listing returns. However, after the impressive listing, Akanda, Genius Group, and Yoshitsu tanked.
Ocean Biomedical is expected to list this week.
Ocean Biomedical is expected to list in the week beginning April 18. The company has kept the IPO price range between $10 and $12 and plans to offer 2 million shares as part of the IPO. Originally, Ocean Biomedical intended to offer 3.2 million shares between $14 and $17 per share.
However, the company slashed the IPO price to between $7 and $9 but increased the shares on offer to 6.3 million. In the filing in 2022, it amended the terms and modified the price range to $10–$12. The final pricing will be announced soon. Looking at the carnage in stock markets, the company probably won't be able to increase the range.
Here's what to expect from the Ocean Biomedical IPO price.
At the midpoint of the range, Ocean Biomedical would raise $22 million and would have a valuation of $222 million. Along with the IPO proceeds, the Regents of the University of California would invest $7 million in the company in a private placement. The price would be 90 percent of the IPO price. Existing investors of Ocean Biomedical also intend to invest another $25 million in the company.
Ocean Biomedical has a vast product pipeline.
Ocean Biomedical is a preclinical company. According to the company, it “is building innovative partnerships with promising researchers and institutions. Together we identify medical discoveries that can change global health outcomes.” The company also said, “We deploy the funding and expertise to move new therapies efficiently from the laboratory to the clinic, to the world.”
Ocean Biomedical has partnered with several leading researchers. The company has partnered with Dr. Jack Elias who has licensed three preclinical assets in pulmonary cancer and fibrosis treatment. The company has also partnered with Dr. Jake Kurtis who has licensed two pre-clinical assets in malaria prevention and treatment. Ocean Biomedical has a focus on infectious diseases, inflammation, and oncology.
Ocean Biomedical is a pre-revenue company.
Ocean Biomedical is a pre-revenue company. The company posted an operating loss of $1.65 million in 2020, which widened to $62.3 million in 2021. The increase in losses was driven by a higher outlay towards R&D. The company is expected to post losses in the near future and will continue to burn cash.
Overall, looking at the macro picture, investors should likely avoid the Ocean Biomedical IPO. Markets sentiments toward pre-revenue and cash-burning companies have been poor and Ocean Biomedical will also have to contend with the pessimism.