It's a familiar story these days: Companies file for initial public offerings with high hopes but usually settle for less.

The most recent IPO - Replidyne Inc., which last week priced a $45 million offering - raised significantly less than the $80 million it would have pulled in at the top of its $14 to $16 price range, set last month. The company's shares ultimately sold at $10 apiece, and Replidyne also cut its projected offering from 5 million shares to 4.5 million. (See BioWorld Today, April 7, 2006.)

A silver lining, however, is that the Louisville, Colo.-based company's stock (NASDAQ:RDYN) has been decently received by Wall Street, trading as high as $10.50 and closing at $10.20 Friday, suggesting the IPO price was on par with investor expectations.

This year, other stocks have mostly held ground after debuts on Nasdaq. BioMimetic Therapeutics Inc., of Franklin, Tenn., which raised $37 million in its May offering of 4.6 million shares priced at $8 each, watched its stock (NASDAQ:BMTI) gain 25 cents on the first day of trading, although by Friday it had retreated to $6.94. South San Francisco-based Novacea Inc.'s shares (NASDAQ:NOVC), which were priced at $6.50 in its $40.6 million IPO done in May, traded about even on its first day but closed Friday at $9.44. (See BioWorld Today, May 11, 2006, and May 15, 2006.)

Pricing 11 million shares at $8 to gain a U.S. listing in April, Canadian firm Labopharm Inc. (NASDAQ:DDSS) also saw its stock rise, gaining 80 cents on the first trading day, closing Friday at $7.45. And though Omrix Biopharmaceuticals Inc.'s stock (NASDAQ:OMRI) lost 9 cents the first day of trading, shares of the New York-based firm closed Friday at $12.30, well above its $10 IPO price. (See BioWorld Today, April 24, 2006, and May 1, 2006.)

IPO pricings seem to be "moving toward more realistic valuations," said Stan Fleming, a managing member at Forward Ventures, a San Diego-based life sciences venture fund. "To have a sustainable bioventure or biotech IPO market, people have to make money, preferably within the first five minutes, or barring that, at least in the first 12 months."

Although investors have both made and lost money this year, few have suffered major losses - the types of IPOs that drive investors out of biotech and help shutter the window. The lower IPOs have helped keep investor interest in the sector. Even if those lower pricings are worrisome from a capital standpoint, Fleming added.

"When the average IPO is below $100 million, it's debatable whether there's really a public market, and it's hard to build sustainable companies in that environment," he told BioWorld Today. "You may satisfy near-term financing requirements but at what price? We may end up with a collection of little orphan biotech companies wandering around in nano-cap hell, with no significant following and limited capital in a capital-intensive industry."

According to BioWorld Industry Snapshots, there have been 16 IPOs through June, with an average take of $49.2 million. Not big figures, certainly, but deals are getting done.

Replidyne's IPO is expected to bring in net proceeds of about $40.3 million - or $46.5 million if underwriters exercise in full their 675,000-share overallotment option.

According to the company's prospectus, about $20 million of that will support clinical trials and other development activities related to Orapem, an oral antibiotic of the beta-lactam class. In December, Replidyne submitted a new drug application for Orapem in acute bacterial sinusitis, community-acquired pneumonia, acute exacerbation of chronic bronchitis and uncomplicated skin and skin-structure infections.

A Phase III trial in acute exacerbation of chronic bronchitis for adult use is ongoing.

Orapem is partnered in the U.S. with New York-based Forest Laboratories Inc., which paid $50 million to Replidyne when the deal was signed in February, followed by a $10 million milestone payment in March. Replidyne could stand to receive up to an additional $190 million in milestones for both adult and pediatric indications of Orapem and retains an option to promote Orapem to pediatricians on an exclusive basis. (See BioWorld Today, Feb. 14, 2006.)

About $5 million from the IPO proceeds have been earmarked for the commercialization of Orapem.

An estimated $12 million will go toward future trials of REP8839, a topical drug candidate for skin and wound infections and for the prevention of Staphylococcus aureus infections, including methicillin-resistant S. aureus infections, in hospital settings. Replidyne completed an investigational new drug application for REP8839 in May.

Remaining funds will be used for general corporate purposes, including the development of other anti-infective compounds, including those derived from the company's discovery program focusing on inhibiting bacterial DNA replication.

Replidyne had a net loss of $7.7 million for the first quarter of 2006. As of March 31, its cash, cash equivalents and short-term investments totaled $150 million.

Following the offering, the company will have about 26.4 million shares outstanding.