This Week's IPOs II: National CineMedia, Mellanox, Switch & Data, Optimer Pharma, Synta Pharma

There are strong networking and pharma themes in this week's IPOs. Beyond the first group, here are some companies on deck: National CineMedia (NCMI), a digital in-theater network mainly focused on advertising; Mellanox Technologies (MLNX), a producer of chip-based networking products; Switch & Data (SDXC) a provider of networking services to Internet-based businesses; Optimer Pharmaceuticals (OPTR), a drug company that is developing innovative anti-infection products; and Synta Pharmaceuticals (SNTA), which develops small molecule drugs for severe medical conditions.

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

NATIONAL CINEMEDIA (NCMI)
Business Overview (from prospectus)

We operate the largest digital in-theatre network in North America that allows us to distribute advertisements and other content for our advertising, meetings and events businesses utilizing our proprietary digital content network. Upon completion of this offering, we will have long-term exhibitor services agreements with our founding members—AMC, Cinemark and Regal, the three largest motion picture exhibition companies in the U.S.—and multi-year agreements with several other theatre operators whom we refer to as network affiliates. The exhibitor services agreements grant us exclusive rights, subject to limited exceptions, to sell advertising and meeting services and distribute entertainment programming in those theatres. The network affiliate agreements grant us exclusive rights, subject to limited exceptions, to sell advertising on their theatre screens.

Offering: 38.0 million at $18-20 per share. Net proceeds of approximately $674.3 million will be used

"to purchase newly issued common membership units from NCM LLC at a price per unit equal to the public offering price per share, less underwriting discounts and commissions and offering expenses of $8.0 million. NCM LLC will use all of the estimated net proceeds of approximately $674.3 million it receives from us to pay a portion of the $686.3 million owed to our founding members for their agreeing to modify our payment obligations under our exhibitor services agreements. NCM LLC will also use $12.0 million from its term loan borrowings for this purpose. We will purchase a number of common membership units equal to the number of shares of common stock sold in this offering."

Lead Underwriters: Credit Suisse, Lehman Brothers

Financial Highlights:

Total revenue increased from $28.6 million during the three months ended September 29, 2005 to $60.7 million during the three months ended September 28, 2006, an increase of $32.1 million, or 112.2%... Total operating expenses increased from $17.4 million during the three months ended September 29, 2005 to $22.4 million during the three months ended September 28, 2006, an increase of $5.0 million, or 28.7%...Net loss decreased from $1.8 million during the three months ended September 29, 2005 to $0.6 million during the three months ended September 28, 2006, a decrease of $1.2 million, or 66.7%.

MELLANOX TECHNOLOGIES (MLNX)
Business Overview (from prospectus)

We are a leading supplier of semiconductor-based, high-performance interconnect products that facilitate data transmission between servers and storage systems through communications infrastructure equipment. Our products are an integral part of a total solution focused on computing, storage and communication applications used in enterprise data centers, high-performance computing and embedded systems. We are one of the pioneers of InfiniBand, an industry standard architecture that provides specifications for high-performance interconnects. We believe that we are the leading merchant supplier of field-proven InfiniBand-compliant semiconductor products that deliver industry-leading performance and capabilities, which we believe is demonstrated by the performance, efficiency and scalability of clustered computing and storage systems that incorporate our products. In addition to supporting InfiniBand, our next generation of products also support the industry standard Ethernet interconnect specification, which we believe will expand our total addressable market.

Offering: 6 million shares at $12-14 per share. Net proceeds of approximately $70 million will be used for product development, R&D, sales and marketing and general corporate purposes.

Lead Underwriters: Credit Suisse, J.P. Morgan

Financial Highlights:

Revenues were approximately $32.7 million for the nine months ended September 30, 2006 compared to approximately $29.9 million for the nine months ended September 30, 2005, representing an increase of approximately 9%...Gross profit was approximately $23.1 million for the nine months ended September 30, 2006 compared to approximate $18.6 million for the nine months ended September 30, 2005, representing an increase of 24%...Research and development expenses were approximately $11.1 million for the nine months ended September 30, 2006 compared to approximately $9.3 million for the nine months ended September 30, 2005, representing an increase of approximately 19%.

SWITCH & DATA (SDXC)
Business Overview (from prospectus)

We are a leading provider of network neutral interconnection and colocation services primarily to Internet dependent businesses including telecommunications carriers, Internet service providers, online content providers and enterprises. As a network neutral provider, we do not own or operate our own network, and, as a result, our interconnection services enable our customers to exchange network traffic through direct connections with each other or through peering connections with multiple parties. Our colocation services provide space and power for customers’ networking and computing equipment allowing those customers to avoid the costs of building and maintaining their own facilities. We provide our services through 34 facilities in 23 markets, representing the broadest network neutral footprint in North America. Our footprint includes our facility in Palo Alto, one of the first commercial Internet exchanges in the world. Our high network densities, as demonstrated by approximately 17,000 interconnections between our customers, create a network effect, which provides an incentive for our existing customers to remain within our facilities and is a differentiating factor in attracting new customers. This network effect combined with our broad geographic footprint contributes to the growth of our customer base and revenue, which we believe will also increase our operating cash flow due to the fixed nature of certain of our operating costs.

Offering: 11.7 million shares at $14-16 per share. Net proceeds of approximately $122.6 million will be used to pay down debt.

Lead Underwriters: Deutsche Bank, Jefferies

Financial Highlights:

Revenues increased by $3.9 million, or 5%, to $82.5 million for the nine months ended September 30, 2006 compared to $78.7 million for the nine months ended September 30, 2005...Cost of revenues increased by $5.3 million, or 13%, to $45.2 million for the nine months ended September 30, 2006 compared to $39.9 million for the nine months ended September 30, 2005...Net loss increased by $2.6 million, or 35%, to a loss of $10.1 million for the nine months ended September 30, 2006 compared to a loss of $7.4 million for the nine months ended September 30, 2005.

OPTIMER PHARMACEUTICALS (OPTR)
Business Overview (from prospectus)

We are a biopharmaceutical company focused on discovering, developing and commercializing innovative anti-infective products. Our initial development efforts address products that treat gastrointestinal infections and related diseases where current therapies have limitations, including diminished efficacy, serious adverse side effects, drug-to-drug interactions, difficult patient compliance and bacterial resistance. We currently have two late-stage anti-infective product candidates, Difimicin and Prulifloxacin.

Offering: 5.3 million shares at $12-14 per share. Net proceeds of approximately $62.0 million will be used to fund clinical trials, R&D activities, and commercialization activities for their products, in addition to general working capital.

Lead Underwriters:Piper Jaffray, Jefferies

Financial Highlights:

Collaboration and grant revenues decreased to $848,000 for the nine months ended September 30, 2006 from $1.5 million for the nine months ended September 30, 2005...Research and development expense increased to $7.3 million for the nine months ended September 30, 2006 from $4.6 million for the nine months ended September 30, 2005..Net interest income and other increased to $931,000 for the nine months ended September 30, 2006 from interest expense of $33,000 for the nine months ended September 30, 2005, an increase of $964,000.

SYNTA PHARMACEUTICALS (SNTA)
Business Overview (from prospectus)

We are a biopharmaceutical company focused on discovering, developing and commercializing small molecule drugs that address severe medical conditions with large potential markets, including cancer and chronic inflammatory diseases. We have a diverse pipeline of clinical- and preclinical-stage drug candidates with distinct mechanisms of action and novel chemical structures. We discovered and developed each of our drug candidates internally, using our unique chemical compound library and the chemistry, biology, and pharmaceutical development assets and capabilities built over the combined history of Synta and its predecessor companies. At present, we retain all rights to all of our drug candidates and programs across all geographic markets and therapeutic indications.

Offering: 6.0 million shares at $14-16 per share. Net proceeds of approximately $82.0 million will be used to fund clinical development of the company's products.

Lead Underwriters: Bear Stearns, Lehman Brothers

Financial Highlights:

We have not yet generated any product revenue and do not expect to generate any product revenue for the foreseeable future. We have recognized, in the aggregate, $1.5 million of revenue since our inception. This revenue was derived entirely from government research grants. We will seek to generate revenue from product sales, and possibly from collaborative or strategic relationships, which could include research and development, profit sharing, and milestone payments, as well as royalties. In the future, we expect that any revenue we generate will fluctuate from quarter-to-quarter as a result of the timing and amount of payments received under any future collaborative or strategic relationships, and the amount and timing of payments we receive upon the sale of our drug candidates, to the extent any is successfully commercialized.