Small caps last week: Record biotech IPO, Wizz Air's solid top line, SpaceX effect

Last week, SpaceX's blockbuster market debut triggered a sharp selloff across other space stocks, while Wizz Air reported higher revenue for the fiscal year but withheld guidance for next year because of geopolitical uncertainty. Meanwhile, Parabilis Medicines completed the largest biotech IPO on record, and investors prepared for a series of FDA decisions and clinical-data releases that could drive volatility across several biotech small caps in the coming weeks. These are the top small-cap stories for June 8-12 in our weekly recap.

Shares of small-cap space companies sold off sharply after U.S. markets opened on Friday, despite a rally ahead of SpaceX's record-breaking IPO. Rocket Lab shares fell around 11% after the open, even though the stock had gained more than 6% before the start of regular trading following the company's addition to the Nasdaq 100 Index. AST SpaceMobile shares were down around 14%, Redwire fell 11%, and Virgin Galactic Holdings plunged almost 35%. The Procure Space ETF was down 7%.

Investors may have been rotating capital out of publicly traded space companies and into the sector's new public heavyweight, Yahoo Finance wrote. SpaceX began trading on the Nasdaq and Nasdaq Texas following a $75 billion offering that valued the company at $1.77 trillion. The stock opened at $150 per share, $15 above the IPO price, and closed at $160.95 per share.

Danish biotech Zealand Pharma reported downbeat clinical-trial results for its obesity drug survodutide: 19% of patients discontinued treatment because of gastrointestinal side effects, versus 2.9% among patients receiving placebo.

Although the drug demonstrated effectiveness in treating obesity, Zealand Pharma shares plunged almost 23% in Copenhagen trading on Monday. Meanwhile, analysts at Citi and Barclays questioned the drug's commercial viability. Wall Street remains divided on the stock. It has 11 "buy" calls from analysts, versus seven "hold" and one "sell" rating.

Hungarian budget carrier Wizz Air ended fiscal 2026 with an 8% increase in revenue to EUR5.7 billion. Passenger traffic was up 10% to a record 69.7 million, while load factor reached 90.7%. However, stronger operating performance did not translate into higher earnings, with net profit cratering 99.4% to EUR1.3 million. According to Wizz Air, the conflict around Iran may have reduced profit by around EUR50 million. The company said it offset most of that impact through previously established fuel-hedging contracts.

Wizz Air declined to provide guidance for fiscal 2027 because of ongoing seasonal uncertainty and risks related to the conflict around Iran and the situation in the Strait of Hormuz.

Biotech company Parabilis Medicines raised $670 million after selling 33.5 million shares at $20 per share, above the initial price range. Following the offering, the company's valuation was estimated at $2.3 billion. It became the largest biotech IPO on record, surpassing the previous record set by Kailera Therapeutics, which raised $625 million in April, Fierce Biotech noted.

Investors proved interested in the company's experimental therapy designed to destroy cancer tumors from within. Parabilis plans to use the IPO proceeds to fund clinical trials, advance new programs, and support general corporate purposes. Parabilis Medicines is trading on the Nasdaq under the ticker symbol PBLS.

European small caps outperformed large-cap stocks in the second quarter. According to BNP Paribas Asset Management, the segment is benefiting from the reshoring of manufacturing to Europe, rising infrastructure investment, and a recovery in M&A activity.

Among the main risks for European small caps, BNP Paribas AM cited inflation, rising government-bond yields, and higher transportation costs linked to the conflict in the Middle East. The firm recommends a barbell strategy that combines stable assets with a limited allocation to higher-risk growth opportunities.

Since the start of 2025, the SPDR S&P Biotech ETF, one of the main benchmarks for the biotech sector, has gained 35.9%. According to Bloomberg Intelligence's catalyst calendar, investors will be watching several key events among small-cap and mid-cap biotech companies this month. Biotech stocks are often driven less by financial results than by regulatory decisions and clinical-trial data that can dramatically alter a company's valuation.

FDA decisions and clinical-data releases are due soon for Spero Therapeutics (June 18), Achieve Life Sciences (June 20), Viridian Therapeutics (June 30), as well as updates from MBX Biosciences (Thursday-Friday) and Intellia Therapeutics (Friday). For investors, these are primarily bets on the likelihood of a specific outcome and thus on elevated volatility.