On Wednesday, immunotherapy drug company Gossamer Bio, which had filed in December, amended its S-1 IPO registration, saying it would sell 14.4 million shares for $16 each, which would raise $230 million. Under SEC regulations, its IPO registration would become automatically effective after 20 days, without the need for further regulatory approval.
Analysts say there are risks to skipping the traditional IPO pricing process and listing shares without a sign off from the SEC. By filing, Gossamer was essentially betting that the government would reopen before the 20 days expired; a bet could now pay off.
"Now that the SEC is open for the next several weeks, (the company) will be in discussions with the SEC about moving forward sooner than the 20 day route," said Kathleen Smith, co-founder and principal of IPO research firm Renaissance Capital, adding that it's likely Gossamer will price its deal through the traditional route within the next week.
Gossamer Bio, which has six treatments in the early to mid-clinical research phase, reported a net loss of $108 million for the first 9 months of last year, according to its regulatory filings. If the firm waits to go public after Feb. 14, it would have to restate its financials to include full-year results for 2018 which could result in a months-long delay of its IPO.
With only a temporary reprieve from the shutdown, the clock is ticking for other firms looking to go public.
"There's going to be a rush to get out of the door," for companies in the IPO pipeline, Smith said. "This may turn the market into a buyer's market more than a seller's market," she said adding, "That may very well be good for investors."