Canada's IPO Market Has Bleakest Start in More Than Two Decades

  • Therapure delays C$130 million share sale on market volatility
  • Canada follows U.S. trend of January shutout for IPOs

Canada is facing the bleakest start to the year in at least two decades for initial public offerings, following the dismal January in the U.S. that also had no IPOs.

February is off to a rough start in Canada, after Therapure Biopharma Inc. postponed its C$130 million ($95 million) IPO due to poor market conditions. Two IPOs for special purpose acquisition corporations, Kew Media Group Inc.’s C$70 million offering and Avingstone Acquisition Corp.’s C$110 million share sale, have yet to begin marketing even though both filed documents last year.

In the U.S., after a January drought, two biotech companies -- BeiGene Ltd. and Editas Medicine Inc. -- sold shares in initial offerings this week, with both pricing within their marketed range. January was the slowest month for U.S. IPOs since December 2008, when no companies filed after the bankruptcy of Lehman Brothers Holdings Inc.

Volatile equity markets have made it challenging to price public offerings. The Standard & Poor’s 500 Index has plunged 6.6 percent to start the year, while the Chicago Board Options Exchange Volatility Index, a gauge of investor nervousness, is above the troubling level of 20. Canada’s benchmark Standard & Poor’s/TSX Composite Index fell 1.4 percent this year.

Canada’s dire IPO market in January was the worst since at least 1995, as far back as data compiled by Bloomberg goes. The best year for Canadian IPOs was in 1997, when 19 offerings, including Manitoba Telecom Services Inc. and Westshore Terminals Investment Corp., raised a combined C$2.19 billion, according to the data.

Therapure, a biological pharmaceuticals maker owned by Catalyst Capital Group Inc., said in a Thursday statement that it decided to postpone its deal “in light of the current market environment, in which no IPOs were concluded in the U.S. or Canada in January.”

Therapure and one of Catalyst Capital’s funds were seeking to sell shares for C$11 to C$13 in the offering, according to a Jan. 6 regulatory filing. The Mississauga, Ontario-based firm is focused on pharmaceutical treatments and on developing blood and plasma-related products. The company’s development has primarily been supported by a fund managed by Catalyst, a Toronto-based firm founded by Newton Glassman.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE