Two Biotech IPOs: Nanosphere Inc., Genoptix

There are two biotech IPOs on deck for this week: Nanosphere Inc (NSPH) developed and markets the the Verigene System, that enables simple, low cost and highly sensitive genomic and protein testing on a single platform; and Genoptix (GXDX) a company that provides specialized laboratory services to hematologists and oncologists.

NANOSPHERE, INC. (NSPH)
Business Overview (from prospectus)

Nanosphere develops, manufactures and markets an advanced molecular diagnostics platform, the Verigene System, that enables simple, low cost and highly sensitive genomic and protein testing on a single platform. Our proprietary nanoparticle technology simplifies molecular diagnostic testing, achieves ultra-sensitive protein detection at limits beyond current diagnostic technologies, provides the ability to multiplex, or run multiple tests at the same time on the same sample, and enables the development of a broad menu of test assays to be performed on a single platform. We received 510(k) clearance from the United States Food and Drug Administration, or FDA, for the Verigene System and our warfarin metabolism assay on September 17, 2007 and for our hyper-coagulation assay on October 12, 2007. Upon receipt of FDA clearance, we commenced sales to hospital-based laboratories and academic research institutions in the United States, which we believe is the primary market for our products.

Offering: 7.0 million shares at $14.00 - $16.00 per share. Net proceeds of approximately $95 million will be used to finance ongoing research and development in connection with the development of additional genomic and protein tests and the next generation Verigene System; to fund additional sales, marketing and service personnel and marketing initiatives in connection with future test and system product launches; for additional working capital and other general corporate purposes, such as business development, financial and administrative support services, the employment of additional personnel and the costs of operating as a public company.

Lead Underwriters: Credit Suisse, Piper Jaffray

Financial Highlights:

Revenues were $1.1 million for fiscal 2006, as compared to $1.9 million for fiscal 2005... For fiscal 2006, cost of product sales was $31,049, as compared to $125,118 for fiscal 2005... Research and development expenses increased to $17.4 million for fiscal 2006, from $13.2 million for fiscal 2005.

Additional Resources:

• Company website
• Online road show
• Press Release: 'Nanosphere Announces FDA Clearance of Second Molecular Diagnostics Assay'
• Red Herring: 'Nanosphere Eyes $100M IPO'

GENOPTIX (GXDX)
Business Overview (from prospectus)

We are a specialized laboratory service provider focused on delivering personalized and comprehensive diagnostic services to community-based hematologists and oncologists, or hem/oncs. Our highly trained group of hematopathologists, or hempaths, utilizes sophisticated diagnostic technologies to provide a differentiated, specialized and integrated assessment of a patient's condition, aiding physicians in making vital decisions concerning the treatment of malignancies of the blood and bone marrow, and other forms of cancer.

Offering: 5.0 million shares at $14.00 - $16.00 per share. Net proceeds of approximately $57.7 million will be used to increase personnel, to establish a second laboratory facility, to expand the company's backup systems, to repay all outstanding indebtedness, to pursue new collaborations, acquisitions or in-licenses of products, technologies that will enable the company to accelerate the implementation of its strategic plan.

Lead Underwriters: Lehman Brothers, Banc of America

Financial Highlights:

Revenues for the six months ended June 30, 2007 increased 165% [to $24,599,000 from $9,279,000 during the same period in 2006.]... Cost of revenues for the six months ended June 30, 2007 has increased [to $10,030,000] over [$5,540,000 during] the six months ended June 30, 2006 primarily due to the increased volume of cases processed...This has resulted in gross margins of 59% and 40% for the six months ended June 30, 2007 and 2006, respectively...

Additional Resources:

• Company website
• Online road show
• AP: 'Genoptix Expects to Raise $57.7M in IPO'