written by reader Recent IPO: MedPace (MEDP) CRO focused on small-cap biotechs

By Jay Ram, August 15, 2016

This is a local company in Cincinnati, where I live, that just did an IPO last week. It popped 22% on the IPO day and continues to steadily rise from there. They are a contract research organization similar to companies like Icon. What I like about this company, however, is their focus on serving the small-cap biotech market. Only about 15% of their business comes from large cap pharmaceutical companies. This looks like a good way to own something of a ”toll bridge” in the biotech world, where you aren’t taking bets on specific medicines since they should benefit as long as the industry in general is growing. Nothing stood out too terribly on the financial side (good or bad). Most of the IPO proceeds are supposed to go into debt reduction, which isn’t ideal in my book, but perhaps provides some breathing room for future growth.

All that said, my experience with biotechs is limited. I generally stay away because I have very little knowledge in the area. This company is a little easier to understand though. Anyone have thoughts on it? For now I’m watching and waiting for any signs of a dip. Stocks have a knack for fluctuating, after all!

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