While initial public offerings (IPOs) aren’t as popular as they were a year ago, considering everything that’s going on with the coronavirus, there are still plenty of promising IPOs that traders can take advantage of. Friday, in particular, saw a number of promising biotech stock IPOs emerge onto the scene, with many of these new stocks seeing significant gains that could continue going into Monday’s trading session.
The first of which was Praxis Precision (NASDAQ: PRAX), a company that has been focusing on nervous system disorders. Praxis has one promising depression drug called PRAX-114. This candidate is currently undergoing phase 2 trials in Australia and is testing whether or not it’s effective in treating patients with major depressive disorder.
Despite the fact that the company still isn’t reporting any revenue, something which is relatively common for the small-cap biotech world, it hasn’t stopped investors from jumping on the opportunity to buy this hot new IPO. Shares of Praxis jumped as much as 46% over the course of Friday’s trading session, pushing its market cap just over the $1 billion price point. Quarterly losses for the company are roughly $10 million every three months, which is manageable.
There were a few other notable biotech IPOs on Friday as well that could still have momentum going into Monday. Tarsus Pharmaceuticals (NASDAQ: TARS) went public last week and saw its stock jump over 29% on Friday. The company focuses on developing ophthalmic (eye-related disorders) treatments. Its main candidate is a drug called TP-03, which treats a type of ocular mite infestation called Demodex blepharitis, which can lead to blindness and damage of the cornea if not treated.
Just like Praxis, Tarsus still isn’t profitable. The company reported $5.2 million in losses for the first half of 2020, which isn’t that bad as far as biotech companies are concerned.
Next on the list of Friday biotech IPOs is Allgos Therapeutics (NASDAQ: ALGS). The company shot up around 17% but ended up losing a fair bit of its value once the day was over. Allgos is working on a few different liver diseases, but its main candidate targets Chronic Hepatitis B. However, trials are still in the early phase 1 stage, meaning that a lot can go wrong during the many years of clinical testing still required for the company.
The last major biotech stock, Kiromic Biopharma (NASDAQ: KRBP), opened on Friday and ended the day down 4.2%. Unlike the other three stocks on this list, Kiromic incorporates an AI network platform to help develop new cancer treatment immunotherapies. While an interesting concept, investors weren’t as excited about the firm’s potential. Like the other companies on this list, Kiromic is losing money, around $13.2 million during the first half of 2020, with profitability remaining quite a distant dream.
Overall, hot IPO stocks tend to pull back a little during the next day following their first trading day. This could be a good opportunity for traders looking to make a quick buck on a reversal. However, as always, be careful, considering how volatile the markets can be in the weeks leading up to the November election, anything can happen.
