US IPO woes continue as ADC Therapeutics pulls listing

The hits keep on coming for US IPOs … and not in a good way.

Biotech startup ADC Therapeutics has decided to postpone its planned New York listing. The Swiss business was expected to sell its shares for between $23 and $26 apiece, which would have seen it raise up to $212 million. ADC's CEO Chris Martin cited "adverse market conditions" as the reason for the withdrawal of the company's registration statement.

The business, which develops therapies to treat hematological cancer and solid tumors, is backed by investors including Auven Therapeutics, Redmile and AstraZeneca. It raised $103 million for the final close of its Series E in July, bringing the round to a total of $303 million.

ADC is one of a handful of companies that have postponed an IPO in the US in the space of two weeks. Last week, one day before it was scheduled to go public, Los Angeles-based talent agency Endeavor canceled its IPO due to weak demand. The Silver Lake-backed company was expected to list its shares at up to $29, below the initial proposed range of $30 to $32 apiece, which would have seen it raise more than $600 million.

Just days later, WeWork pulled its listing, which was anticipated to be one of the most high-profile Wall Street debuts of the year. The company—valued at $47 billion in January—had reportedly reduced the expected valuation for its IPO to as low as $10 billion before calling it off altogether. The embattled company has been overwhelmed by scrutiny into its finances and controversies surrounding erstwhile CEO Adam Neumann and his wife. Now, its new management is looking to raise fresh funding and sell certain operations to private investors—most likely its biggest champion, SoftBank—per The New York Times, though some have expressed skepticism over whether WeWork can reduce costs fast enough to stave off bankruptcy.

To make matters worse, the companies that have followed through on their IPOs might be wishing they hadn't. The US has witnessed a string of disappointing debuts, including spin-focused fitness startup Peloton, which saw its shares sink 11% in its first day of trading—marking the past decade's third-worst trading debut for a US company raising $1 billion-plus, per Bloomberg. According to CEO John Foley via an SEC filing, the business "sells happiness," but it hasn't necessarily inspired that feeling in investors, as it has traded below its opening price since going public.

Like Peloton, Uber's share price just keeps falling, hitting record lows in recent times, and its rival Lyft is doing no better. These examples will do little to motivate investors who are becoming wary of young companies with big names and even bigger losses.

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