The latest crop of biotech IPOs on NASDAQ is getting internet-like pops in their first few days of trading. Six of the 13 NASDAQ-listed deals this month have traded up 50 percent or more in their first day of trading. While bankers are trying to place the shares in long-term hands, the short-term gains could bait even the most dedicated biotech investor to flip the stocks (see "The lure of paper profits").

Chase H&Q banker Vivek Jain is keeping a close eye on whether the new IPO buyers are flipping. With biotech such a hot space and IPOs being several times oversubscribed, there are new faces in the road-show crowd. That's making it more challenging for investment bankers to identify who's a long-term buyer and who's a flipper, according to Jain. "It's a struggle determining who's real and who's not," he said. "Now we're seeing who's in some of these IPOs 45 days later, and it's a totally different group of names."

"The whole idea is to separate the real players from the momentum players," said Jack Lief, president and CEO of Arena (ARNA). According to Lief, buysiders were overflowing in the company's road show meetings, and it had firm orders for more than 50 million shares. ARNA, which is developing compounds that act on G protein-coupled receptors, ended up selling 6 million shares at $18, raising $108 million (see below).

Flipping was a concern of Applied Molecular Evolution (AMEV), which sold its $88.4 million IPO on Thursday, so the company tried to time the deal to increase the chances of getting quality long-term shareholders, according to CFO Lawrence Bloch. "The quick flippers were a concern of the management team, and that's why we went out when we did, when the markets weren't as foamy as they were in February," he said.

Mitch Silber of The Carson Group said he hasn't seen too much flipping on the new deals. "If anything, we've seen more of a burst on the first day of trading, which would suggest that investors are holding on in the belief that someone will buy the shares at a higher price," he said.