Quintiles Transnational (Q) , the drug clinical trials giant, got a decent reception on the NYSE Thursday in a busy day for IPOs.
The largest contract research organization's shareholders late Wednesday decided to offer 4 million shares more than previously planned, for a total of 23.7 million. After the stock priced atop its expected range at $40, the firm raised $947 million.
Quintiles rose 5% to 42.11 on the stock market Thursday after hitting a high of 44.33.
Anticipation seemed to be running high before the deal priced. Analysts say that an outsourcing trend is boosting companies like Quintiles, which conduct drug research and clinical trials by contract.
"Quintiles is going public at a ripe time," wrote Morningstar analyst Lauren Migliore in a research report Monday. "The contract research organization, or CRO, industry rebound is in full swing, and the recovery has translated into substantial share price appreciation for the other publicly traded firms.
Such highflying CRO stocks include Icon (ICLR), Parexel (PRXL) and Covance (CVD). Covance is the second-largest player in the industry, but still 70% smaller by revenue than Quintiles, which pulled in $4.9 billion last year. Quintiles is growing more modestly than some rivals, though; 2012 earnings rose just 8% to $1.56 a share.
It's Quintiles' second time as an IPO. It went public in 1997, but became private again in 2003.
Quintiles was the largest of seven IPOs to debut Thursday, as new-issue demand seemed to catch fire again. Fast-growing mortgage lender PennyMac Financial Services (PFSI), a startup founded by the former president of Countrywide Financial, priced at $18, the midpoint of its range, to raise $200 million. PennyMac closed 6% higher at 19.10.
Computer networking specialist Cyan (CYNI) also priced at its midpoint at $11. Its shares climbed 1% to 11.14 on the NYSE.
"If all scheduled deals are completed, this week may turn out to be the most active week of IPO pricings in over five years (since November 2007, when 11 were done in the week of 11/12/07 and 13 done in the week of 11/5/07)," wrote Kathy Smith, an analyst for Renaissance Capital, in an email.
- Quintiles Transnational