Some warning signs

The IPO geyser continues to spew money - with 8 deals raising $580 million last week, bringing to $2.4 billion the total raised through IPOs in the past four weeks. But leading indicators may be beginning to point toward a waning of the biotech love-in: Of the 8 IPOs that priced last week, 3 raised less than they had hoped and only 4 traded up beyond 15 percent in the aftermarket.

"I think we're starting to see some saturation," said Chase H&Q banker Vivek Jain. "Premiums are coming down, deals are getting trimmed and you're not seeing the deals trade up 30 to 40 percent."

Lehman banker Eric Roberts said buysiders are beginning to grumble about being overfed. "Starting about a week or two ago, we've been hearing that they were reaching the saturation level on biotech deals and equity deals in general. Investors have made a lot of money buying quality deals and now they're saying, 'I don't want to stub my toe by chasing deals at the end of a cycle.'"

Indeed, another indicator of softness is the lack of new deals. Only $484.3 million of paper has been put in the IPO queue in the third quarter. About $1.7 billion remains in the pipeline, down from the $4.1 billion from 46 companies in mid-June.

Nevertheless, most bankers polled by Ebb & Flow remain encouraged by the performance of the broader biotech group. The

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