Today: Novato's Ultragenyx caps off a record-breaking run for biotech companies that another SIlicon Valley company will join next week, as Box reportedly preps the biggest tech IPO of early 2014. Also: Google, Facebook and Zynga soar as Wall Street closes out depressing month.
The Lead: Ultragenyx's blowout IPO highlights biotech hot streak ahead of Box
The Bay Area's first initial public offering of 2014 capped off a record-breaking streak for the biotech market Friday that looks to continue next week, while big names in Silicon Valley prep their own IPOs.
Novato-based Ultragenyx obviously found great demand for its shares: After originally expecting to sell 4.8 million shares in a range from $14 to $17, the company increased the number of shares to 5.8 million and bumped the price up to $21, for a total take of $121 million. When trading began Friday morning on the Nasdaq under the ticker symbol RARE -- chosen because Ultragenyx develops drugs for extremely rare diseases -- the share price immediately doubled, moving as high as $47.99 before closing at twice its IPO price, $42.
The North Bay company's success is not out of the ordinary -- Renaissance Capital reports that five biotech companies were expected to price IPOs this week, with eight more scheduled for next week and two more the week after. Depending on timing, that could lead to a record-breaking 14 or 15 biotechnology debuts in a two-week period, easily defeating the previous high of six in 2000.
One of next week's expected entrants is also from the Bay Area. Newark-based Revance Therapeutics, which is working on new formulations of Botox, is looking to fetch $14 to $16 apiece for 5 million shares, which would generate $75 million at the midpoint of the pricing range. Other Bay Area biotech companies in the IPO pipeline include Emeryville's KineMed and Menlo Park-based Asterias Biotherapeutics, while CardioDX of Palo Alto could decide to refile after delaying its IPO during a slowdown for the industry in the fourth quarter of 2013.
Last year's slowdown appears to be done now, as Renaissance reports that more than half the IPOs currently scheduled are biotechs -- a number that usually rests at 9 percent -- and the offerings scheduled through mid-February would generate estimated proceeds of nearly a billion dollars, more than the full-year total for the sector in any year from 2008 to 2012.
"It is impossible to say whether the rest of 2014 will sustain these levels, but one thing is certain: like a shot in the arm, biotechs are back," the IPO research firm's blog post on the trend concluded.
While biotechs rule the market for now, pure-tech companies from Silicon Valley are primed to jump into the IPO spotlight. Most prominently, The New York Times and Wall Street Journal reported Thursday that cloud-storage software company Box has filed privately for an IPO that cofounder and CEO Aaron Levie has admitted is inevitable. The Los Altos company, which Levie describes as "a universal, lifetime backup and sharing service," has been a hit with enterprise customers and venture capitalists, who have poured nearly $400 million into the company, with its most recent round valuing Box at $2 billion.
Box may not even be the biggest IPO candidate in its immediate field, however: San Francisco competitor Dropbox recently raised a monster funding round that could have raised up to $450 million at a valuation approaching $10 billion. That valuation would make Dropbox the most valuable private technology company in Silicon Valley, ahead of Palo Alto's Palantir, which raised its own gigantic funding round recently.
Beyond those companies, expect to see many smaller tech firms jump into the hot IPO market in the coming months. On Friday, Mountain View-based Coupons.com publicly filed for its IPO, though the company did not provide anticipated share count or price.
SV150 market report: Google, Facebook hit new records, Zynga zooms higher
Wall Street closed out a gloomy January with further declines Friday, making the month the worst for U.S. stocks in two years. The latest decline wasn't felt in Silicon Valley, however, as the SV150 index gained amid record highs for Google and Facebook and a big leap for Zynga.
Google rocketed to a record intraday high of $1,186.54 and closed with a 4 percent increase at $1,180.97 after reporting fourth-quarter earnings that showed a 17 percent uptick in profits and revenues. Analysts praised the company's ability to continue generating revenues despite a decline in the amount Google receives per ad click, and they were also kind in regards to Google's sales of Motorola Mobility for $2.9 billion. "The divestiture of the (Motorola Mobility) business only strengthens the company's position by allowing them to focus on their core competencies -- but still making the kind of long-term forays which have been successful in the past," RBC Capital Markets analyst Mark Mahaney wrote in a Friday note; Mahaney increased his price target on the stock from $1,300 to $1,400. Google's shares won't be sitting in the quadruple digits for very long, though -- the Mountain View search giant expects its stock split to go through in early April.
Facebook reached all-time high prices for a second consecutive day Friday as investors continued to celebrate the company's strong fourth-quarter earnings report, gaining 2.4 percent to $62.57. The Menlo Park social network is prepared to do battle with San Francisco rival Twitter on Sunday, when the two social networks vie for second-screen eyeballs during the Super Bowl; Twitter gained 1.6 percent to $64.50. For close Facebook partner Zynga had the largest percentage gain in the SV150 on Friday, jumping 3.6 percent to $4.40 after announcing layoffs and an acquisition seen as a last-ditch effort for the social-gaming company.
Netflix gained 1.2 percent to $409.33 after Morgan Stanley analyst Scott Devitt raised his rating on the Los Gatos video-on-demand company, admitting he was wrong about the company's ability to continue luring new subscribers. Yahoo increased 2 percent to $36.01 despite Thursday afternoon's admission of an attack on its email service, as Re/Code's Kara Swisher reported on the secret search ambitions of CEO Marissa Mayer. Riverbed Technology, which is facing possible acquisition heat, dropped 0.3 percent to $19.72 after its earnings report, and JDS-Uniphase gained 4.5 percent to $13.29 after the Milpitas company released its quarterly financial performance.
Up: Zynga, Google, Facebook, Yahoo, Twitter, EA, LinkedIn, Netflix, Yelp
Down: Juniper, Symantec, SolarCity, NetApp, AMD, Oracle, Intuit, Pandora, Gilead, Sandisk
The SV150 index of Silicon Valley's largest tech companies: Up 4.59, or 0.31 percent, to 1,492.08
The tech-heavy Nasdaq composite index: Down 19.25, or 0.47 percent, to 4,103.88
The blue chip Dow Jones industrial average: Down 149.76, or 0.94 percent, to 15,698.85
And the widely watched Standard & Poor's 500 index: Down 11.6, or 0.65 percent, to 1,782.59
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.