By Eric Pierce
& Shaun Brown
Staff writers

At first blush, the five U.S. IPOs that have priced in the last three weeks have not lived up to their expectations. The group has raised $273 million, but in doing so has left $203 million on the table based on their stated targets. Indeed, the pessimists will note that the average take by the recent group is down 12 percent to $54.6 million from the $62.1 million average in the U.S. IPO class of '99.

But in the current world of wild expectations, they may not have noticed that the size of the latest deals nearly doubles the average for each year between 1994 and 1998 (see "Half Full or Half Empty?"). And the recent group's average will go up, as only cancer play Praecis (PRCS) has sold its overallotment. Rounding out the group is pharmacogenomics play Orchid (ORCH); gene function and bioinformatics play Paradigm (PDGM); Genomic Solutions (GNSL), a manufacturer and marketer of genomic and proteomic instrumentation, software consumables and services; and ViroLogic (VLGC), which is developing viral drug resistance detection technology.

Street watchers point out that the anomalous size of first quarter IPOs has caused expectations to balloon, while offerings are now returning to more realistic levels. The average IPO in the first quarter raised $124.8 million and had a post-money valuation of $500.1 million. "We're going back to pre-boom valuations," said Wayne Rothbaum, partner at The Carson Group. He warned against reading too much into the change, noting that the size of the first quarter IPOs was a function of too much money chasing too little paper.

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