This Week's IPOS, Part II: Affymax, Cal Dive International, Guidance Software, US BioEnergy, IPG Photonics,

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Includes: AFFY, DVR, GUID, IPGP, USBE
by: Abbi Adest

More IPOs on tap for this week: Affymax (NASDAQ:AFFY), a biotech company; Cal Dive International (NYSE:DVR), market leader in diving services for the oil and natural gas industry on the Gulf of Mexico Outer Continental Shelf; Guidance Software (NASDAQ:GUID), a developer of forensic software that analyzes digital data across a network; US BioEnergy (USBE), ethanol producer; and IPG Photonics (NASDAQ:IPGP), produces fiber lasers for communications, materials processing and medical applications.

All quotations are from the companies' most recent S-1 filings with links provided for each company.

AFFYMAX (AFFY)

Business Overview (from prospectus)

We are a biopharmaceutical company developing novel peptide-based drug candidates to improve the treatment of serious and often life-threatening conditions. Our lead product candidate, Hematide, is designed to treat anemia associated with chronic kidney disease and cancer. A major cause of anemia, a serious condition in which blood is deficient in red blood cells and hemoglobin, is insufficient production of, or insufficient response to, erythropoietin, or EPO, a naturally occurring hormone that stimulates the production of red blood cells. Hematide is a synthetic peptide-based erythropoiesis stimulating agent, or ESA, designed to stimulate production of red blood cells. Hematide is Affymax logodesigned to be longer acting than recombinant EPO-based products which are the only currently marketed ESAs. As a result, we believe Hematide has the potential to offer both better care for patients and reduced cost and complexity for healthcare providers. We are currently conducting Phase 2 clinical trials in patients suffering from end-stage renal disease who are on dialysis, as well as in earlier stage chronic kidney disease patients, or predialysis patients. If the results of our ongoing Phase 2 trials for Hematide continue to be positive, we would expect to commence separate Phase 3 trials in both dialysis and predialysis patients during 2007. In oncology supportive care, we have begun a Phase 2 clinical trial evaluating Hematide in cancer patients who suffer from anemia as a consequence of their chemotherapy treatment.

Offering: 3.5 million at $22-24 a share. Net proceeds are expected to reach $72.3 million. The money will be used to to support research and development activities for Hematide and other product candidates; to fund activities in preparation for the potential commercial launch of Hematide; and for working capital and other general corporate purposes.

Lead Underwriters: Morgan Stanley, Cowen & Co., Thomas Weisel

Financial Highlights:

We have experienced significant operating losses since our inception in 2001. At September 30, 2006, we had a deficit accumulated during the development stage of approximately $164.6 million. We have generated no revenue from product sales to date. We have funded our operations to date principally from the sale of our securities and from payments by Takeda under our collaboration agreements. We expect to continue to incur substantial additional operating losses for the next several years as we pursue our clinical trials, prepare for commercialization of our initial products, begin new development programs and add the necessary infrastructure to support operating as a public company. Even if we receive regulatory approval for one or more products, we must successfully commercialize our products before we can become profitable. We anticipate that it will be at least several years before we can commercialize our lead product candidate, Hematide, and even longer for our current product candidates, if at all. Accordingly, we may never generate significant revenues and, even if we do generate significant revenues, we may never achieve or sustain profitability.


CAL DIVE INTERNATIONAL (DVR)

Business Overview (from prospectus)
Cal Dive Logo

We are a direct, wholly owned subsidiary of Helix Energy Solutions Group, Inc., a diversified energy services company. We are a marine contractor providing manned diving, pipelay and pipe burial services to the offshore oil and natural gas industry. Based on the size of our fleet, we believe that we are the market leader in the diving support business, which involves services such as construction, inspection, maintenance, repair and decommissioning of offshore production and pipeline infrastructure, on the Gulf of Mexico Outer Continental Shelf, or OCS. We also provide these services directly or through partnering relationships in select international offshore markets, such as the Middle East (United Arab Emirates, Oman, Egypt and Saudi Arabia) and Trinidad. Based in Houston, Texas, we currently own and operate a diversified fleet of 26 vessels, including 23 surface and saturation diving support vessels as well as three shallow water pipelay vessels. We believe that our fleet of diving support vessels is the largest in the world. Our customers include major and independent oil and natural gas producers, pipeline transmission companies and offshore engineering and construction firms.

Offering: 22.2 million shares at $14 - 16 a share. Net proceeds are expected to reach approximately $307.0 million, assuming an initial public offering price of $15 per share. The proceeds will be distributed to Helix as a dividend.

Lead Underwriters: Banc of America, J.P. Morgan

Financial Highlights:

For the nine months ended September 30, 2006, our revenues increased 193% to $372.9 million, compared to $127.2 million for the nine months ended September 30, 2005. This increase was primarily a result of the Torch and Acergy acquisitions in the third and fourth quarters of 2005, respectively... Gross profit for the nine months ended September 30, 2006 increased 335% to $168.9 million, compared to $38.9 million for the nine months ended September 30, 2005... Cash flow from operating activities in the first nine months of 2006 was $107.8 million, an increase of $92.0 million from the $15.8 million provided during the first nine months of 2005. The primary driver of this increase was net income, which rose to $93.2 million during the first nine months of 2006 from $20.1 million during the first nine months of 2005.


GUIDANCE SOFTWARE (GUID)

Business Overview (from prospectus)
Guidance software

We develop and provide the leading software solutions for digital investigations. EnCase® Enterprise, our flagship product, enables corporations and government agencies to search, collect, preserve and analyze, from a single location, data across the servers, desktops and laptops that comprise their entire network. Our EnCase® Forensic software, which we believe is the industry standard tool in the field of digital forensic software, is used primarily by law enforcement and government agencies for searching, collecting, preserving, analyzing and authenticating electronic computer forensic data for use in criminal and civil court proceedings. We also offer a comprehensive array of forensic investigation and training services to help our customers manage their internal digital investigations, including eDiscovery requests, and learn how to effectively and efficiently use our software. Our EnCase® Enterprise customer base currently includes more than 95 of the Fortune 500, and we have deployed approximately 24,000 units of our EnCase® Forensic software to more than 1,000 government and law enforcement agencies and other customers worldwide.

Offering: 5 million shares at $12.50 - $14.50 a share. Net proceeds are expected to reach approximately $37.3 million. The proceeds will be used for general corporate purposes, including working capital, capital expenditures and potential acquisitions of complementary businesses, products and technologies.

Lead Underwriters: Morgan Stanley, Lehman Brothers, Wachovia Securities.

Financial Highlights:

Revenues were $39.4 million for the nine months ended September 30, 2006 compared to $27.2 million for the nine months ended September 30, 2005, an increase of $12.2 million or 44.9%... Cost of revenues was $11.2 million for the nine months ended September 30, 2006 compared to $8.1 million for the nine months ended September 30, 2005, an increase of $3.1 million or 37.9%. Gross profit as a percentage of revenues was 71.6% and 70.2% for the nine months ended September 30, 2006 and 2005, respectively.

US BIOENERGY (USBE)

Business Overview (from prospectus)
US BioEnergy Logo

We currently own and operate three ethanol plants, and we have three additional ethanol plants under construction. Upon completion of these initiatives, we will own and operate six plants with a combined ethanol production capacity of 500 million gallons per year, or mmgy. We also have three ethanol plants in development that we believe will have a combined production capacity of 200 mmgy. Based on data published by the Renewable Fuels Association, or RFA, the national trade association for the U.S. ethanol industry, we believe that we are one of the largest ethanol producers in the U.S.

Offering: 9.4 million at $15-17 a share. Net proceeds are expected to be approximately $135.0 million. The proceeds will be used for construction costs, repayment of debt and general corporate purposes.

Lead Underwriters: UBS Investment Bank, Piper Jaffray.

Financial Highlights:

We were incorporated in October 2004 and did not engage in any revenue producing activities until we acquired United Bio Energy, LLC on May 1, 2005. In April 2006, we acquired our first operating ethanol plant. Accordingly, we have a limited operating history from which you can evaluate our business and prospects. Moreover, since our inception we have incurred losses and have yet to recognize net income. For the period from October 28, 2004 (inception) through December 31, 2004, for the year ended December 31, 2005 and for the nine months ended September 30, 2006, we incurred losses of $54,000, $4.2 million and $523,000, respectively.


IPG PHOTONICS (IPGP)

Business Overview (from prospectus)

IPG Photonics Logo

We are the leading developer and manufacturer of a broad line of high-performance fiber lasers for diverse applications in numerous markets. Since our founding in 1990, we have pioneered the development and commercialization of optical fiber-based lasers. Fiber lasers are a new generation of lasers that combine the advantages of semiconductor diodes, such as their long life and high efficiency, with the high amplification and precise beam qualities of specialty optical fibers to deliver superior performance, reliability and usability at a generally lower total cost of ownership compared to CO2 and crystal lasers. Our products are displacing traditional lasers in many current applications and enabling new applications for lasers. Our vertically integrated operations allow us to rapidly develop and integrate advanced products, protect our proprietary technology and ensure access to critical components while reducing manufacturing costs.

Offering: 9 million shares at $13.50 - $15.50 per share. Net proceeds are expected to reach approximately $81.8 million. The proceeds will be used to repurchase series B warrants, to repay certain outstanding indebtedness and for general corporate purposes.

Lead Underwriters: Merrill Lynch, Lehman Brothers.

Financial Highlights:

Our net sales increased by $38.9 million, or 62.5%, to $101.1 million in the nine months ended September 30, 2006 from $62.2 million in the nine months ended September 30, 2005. This increase was primarily attributable to a higher volume of sales of fiber lasers in materials processing applications, where net sales increased by $34.7 million or by 89.1% of the total increase in net sales...Our cost of sales increased by $16.2 million, or 38.8%, to $58.0 million in the nine months ended September 30, 2006 from $41.8 million in the nine months ended September 30, 2005, as a result of the increased sales volume. Our gross margin increased to 42.7% in the nine months ended September 30, 2006 from 32.9% in the nine months ended September 30, 2005 because of a reduction in the cost of our internally manufactured optical components, including semiconductor diodes, more favorable absorption of fixed manufacturing costs as a result of higher production volumes and, to a lesser extent, a shift in product mix including increased sales of higher-margin low and mid-power fiber lasers and reduced sales of certain types of lower-margin fiber amplifiers.