Executing a Successful IPO During a Pandemic

Solebury Capital and Solebury Trout advised Zentalis through their successful Initial Public Offering on April 2, the first IPO to come out since the COVID-19 pandemic shutdown. Zentalis utilized the full suite of Solebury services—Investor Relations, Corporate Communications and Capital Markets Advisory—to support its fund raising through this unprecedented time.    

Overview

  • Solebury Trout supported Zentalis as it came out of stealth in late 2019 by announcing an $85mm Series C, organizing meetings and bespoke engagements with leading institutional investors prior to Testing-the-Waters (TTW);
  • Solebury Capital acted as IPO advisor;
  • Extensive TTW meetings organized by Solebury Trout and the banks during and in the weeks following JPM conference;
  • S-1 filed publicly March 6, 2020, two days before World Health Organization declares COVID-19 a pandemic;
  • The S&P 500 traded down 16% from filing to launch, falling as much as 26% during the period prior to launch; VIX index at launch of roadshow: 66%;
  • Abbreviated, four-day virtual roadshow;
  • Solebury Trout’s Corporate Communications coordinated the first virtual bell ringing on the NASDAQ;
  • A new corporate website and IR website, launched with the IPO, was created by Solebury Trout Corporate Communications.

Deal Statistics at IPO

Filing Date:  03/06/2020
Launch Date:  03/30/2020
Pricing Date:  04/02/2020
Marketing Range:  $16.00 - $18.00
Offer Price:  $18.00
Midpoint-to-Offer:  +5.9%
One Day Price Change: +28.9%
Initial Pre-Shoe Size:  7.7mm
Revised Pre-Shoe Size: 9.2mm
Greenshoe: 1.4mm
% Secondary:  0%
Total Proceeds:  $190 mm
Market Cap:  $619.3mm
% of Market Value: 26.7%

Banks – Morgan Stanley, Jefferies, SVB Leerink, Guggenheim

Key Outcomes

  • First healthcare IPO to launch with a VIX north of 50;
  • First 100% virtual roadshow IPO executed over a four-day marketing effort with no weekend risk;
  • IPO was upsized by 20% from $130mm to $165mm and priced at the high end of the marketing range, full overallotment exercised for $190mm in gross proceeds to the issuer;
  • Valuation at IPO was a 1.4x step-up from the valuation at Series C, announced just 4 months prior;
  • Shares closed +28.9% on the first day of trading, despite the elevated VIX index.

Zentalis Highlights

  • Founded in 2015, focused on the creation of differentiated small molecule treatments targeting fundamental, well known biological pathways of cancer;
  • Proprietary Integrated Discovery Engine has led to the filing of four INDs since inception, with multiple ongoing clinical studies;
  • Lead candidate oral SERD in Phase 1/2 trial for advanced or metastatic breast cancer;
  • Experienced management, seasoned scientific advisory board and support from leading life sciences investors including Matrix Capital, Tybourne, Viking, Redmile, Farallon, Perceptive, Surveyor and Eventide.