This Week's IPOs Part II: Replidyne, Wintegra, Aventine Energy (RDYN, WNTG, AVR)

by: Abbi Adest

Three more companies are going public this week: Replidyne (RDYN), Wintegra (WNTG), and Aventine Renewable Energy (AVR). The following are key details from their respective SEC filings:


Business (from Prospectus):

We are a biopharmaceutical company focused on discovering, developing, in-licensing and commercializing innovative anti-infective products. Our lead product, Orapem, is a novel oral, community antibiotic, meaning that it is generally used to treat infections acquired in the community and not in a hospital setting. Forest Laboratories is our partner for the development and commercialization of Orapem in the U.S. Orapem is a member of the penem sub-class within the beta-lactam class of antibiotics. Beta-lactam antibiotics all share a core structural feature (a beta-lactam ring) and include antibiotics such as penicillins and cephalosporins. The penem sub-class of beta-lactam antibiotics has structural features that resemble a fusion of the penicillin and cephalosporin core structures and has an intrinsic ability to resist degradation by commonly encountered enzymes that inactivate some other beta-lactam antibiotics. Beta-lactams are generally characterized by their favorable safety and tolerability profiles, as well as their broad spectrum of activity, and as a result are typically used as first-line therapy in many respiratory and skin infections in adult and pediatric patients.

In December 2005, we submitted a New Drug Application, or NDA, to the U.S. Food and Drug Administration, or FDA, for Orapem. If approved by the FDA, Orapem would be the first orally available penem in the U.S. Our NDA is based on 11 Phase III studies, conducted by Bayer AG when it was a previous licensee of Orapem, and safety data for over 5,000 patients who have been treated with Orapem. We believe that Orapem’s safety profile and activity against many common bacterial infections suggest the potential for Orapem to become a leading branded oral beta-lactam antibiotic.

Underwriters: Merrill Lynch, Morgan Stanley

Offering: Range between $14-16. The company is offering 5 million shares and will use the proceeds to fund clinical trials and other research and development activities; to fund activities in preparation for the potential commercial launch of Orapem; and for working capital, capital expenditures and other general corporate purposes.

Financial Highlights:

While we have generated limited amounts of revenue from license and milestone payments under our collaboration agreements and payments for funded research and development, we have not generated any revenue to date from product sales. We have incurred significant operating losses since our inception in 2000. We incurred net losses of approximately $14.0 million in 2003, $19.2 million in 2004, $33.7 million in 2005 and $7.7 million in the three months ended March 31, 2006. As of March 31, 2006, we had an accumulated deficit of $92.5 million, and we expect to incur losses for the foreseeable future. We are unable to predict the extent of future losses or when we will become profitable, if at all. Even if we succeed in developing and commercializing one or more of our product candidates, we may never generate sufficient revenue to achieve and sustain profitability.

Select Competitors: Sanofi-Aventis (NYSE:SNY), GlaxoSmithKline plc (NYSE:GSK)


Business (from Prospectus)

Wintegra is a leading provider of access processing semiconductors which enable the delivery of new services in the evolving communications network infrastructure. We integrate our access processors with our networking software to deliver proprietary solutions that provide the essential intelligence, or critical processing functions, for access infrastructure equipment. Our customers use our access processor solutions to rapidly bring to market feature-rich products that meet existing networking requirements as well as support the convergence of voice, video, data and wireless services. We target access infrastructure equipment used in markets such as wireless infrastructure, digital subscriber line, or DSL, optical access, multi-service access, voice over Internet Protocol, or VoIP, and access routers. Our solutions are designed into equipment for many leading communications original equipment manufacturers, or OEMs, such as Carrier Access Corporation, Cisco Systems, Inc., Corecess, Inc., ECI Telecom, Ltd., Fujitsu Limited, Lucent Technologies, Inc., Motorola, Inc., RAD Data Communications, Ltd., Siemens AG, Tellabs, Inc., Zhone Technologies, Inc. (formerly Paradyne Networks, Inc.) and ZyXel Communications Corp.

Underwriters: Goldman Sachs, J.P. Morgan, CIBC World Markets

Offering: Range between $12-14. The company is offering 5 million shares of common stock, 1.83 million of which are from selling stockholders. The company intends to use the net proceeds from this offering primarily for general corporate purposes, including working capital, sales and marketing and research and development expenditures and, to a lesser extent, capital expenditures. Approximately $4.0 million of the net proceeds of this offering will be used to repay currently outstanding bank debt. A portion of the net proceeds may also be used to acquire complementary technologies or businesses.

Financial Highlights:

We were incorporated in January 2000 and initiated commercial shipments of our access processor solutions into production in the fourth quarter of 2002. Our revenues increased from $4.5 million in 2003 to $9.3 million in 2004 and to $19.6 million in 2005. We currently sell our access processor solutions for deployment in the wireless infrastructure, DSL, optical access, multi-service access, VoIP and access router markets. Sales to the DSL market represented 37% of our revenues in 2003, 45% of our revenues in 2004, 58% of our revenues in 2005 and 45% for the first quarter of 2006. We anticipate that sales to the DSL market will decline as a percentage of revenues from 2005 to 2006 but that this market will continue to be our largest end market in 2006.

Select Competitors: Applied Micro Circuits (NASDAQ:AMCC), Broadcom (BRCM), Conexant (NYSEARCA:CNXT)


Business (from Prospectus):

We are a leading producer and marketer of ethanol in the United States based both on the number of gallons produced and sold. Through our production facilities, marketing alliances with other producers and purchase and resale operations, we marketed and distributed 529.8 million gallons of ethanol in 2005 and 164.9 million gallons in the three months ended March 31, 2006. For the year ended December 31, 2005, we sold approximately 13.5% of the total ethanol volume in the United States. We market and distribute ethanol to many of the leading energy companies in the United States. We have comprehensive national distribution capabilities through our leased railcar fleet and terminal network at critical points on the nation's transport grid where our ethanol is blended with our customers' gasoline. In addition to producing ethanol, our facilities also produce several co-products, such as corn gluten feed, corn germ and brewers' yeast, which generate incremental revenue and recapture a portion of our corn costs.

Underwriters: Banc of America Securities LLC, Friedman Billings Ramsey, Goldman, Sachs & Co.

Offering: Range between $37-41. The company is offering 7.8 million shares. The net proceeds from the sale of the common stock will amount to approximately $237.5 million after deducting the estimated expenses and underwriting discounts and commissions. The company intends to use approximately $168.9 million of the net proceeds to tender for all $160 million aggregate principal amount of our outstanding senior secured floating rate notes due 2011 (including the payment of a tender premium and related fees and expenses) and the remaining net proceeds for general corporate purposes, including the expansion of production capacity through acquisitions and construction of additional production capacity.

Financial Highlights:

For the year ended December 31, 2005 and the three months ended March 31, 2006, we also generated approximately $192.4 million and $55.3 million of revenue, respectively, from the sale of ethanol produced at our facilities, which we refer to as "equity production revenue." Net sales in the three months ended March 31, 2006 were $313.5 million compared to $197.0 million for the three months ended March 31, 2005, an increase of $116.5 million or 59.1%. This increase was mainly the result of an increase in the average gross ethanol price from $1.55 per gallon for the quarter ended March 31, 2005 to $1.79 per gallon for the quarter ended March 31, 2006 and increased demand for ethanol, largely due to the tightening of gasoline supplies and higher prices. The sales increase was also driven by a 26.5% increase in the volume of ethanol sold from 121.2 million gallons in the three months ended March 31, 2005 to 164.9 million gallons in the same period in 2006.

Our gross margin remained stable at 9.8% for the three months ended March 31, 2006 compared to 9.6% for the three months ended March 31, 2005. Our stable gross margin was largely a result of sustained ethanol prices and a favorable spread between ethanol prices and net corn costs.

Select Competitors: Archer-Daniels-Midland Company (NYSE:ADM), Cargill, Inc. and A.E. Staley Manufacturing Company