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Avici issue jumps 212%
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July 28, 2000: 6:29 p.m. ET
Corvis gains 135%; lllumina up 145% as biotechs continue rebound
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NEW YORK (CNNfn) - Three deals hit home runs in the new issues market Friday, with Avici Systems Inc., a developer of high-speed data networking equipment, surging 211 percent, Corvis Corp., a maker of optical switching equipment, climbing 129 percent, and biotech Illumina Inc. rising 145 percent.
Five other deals also scored base hits. WebEx, a communications services provider, rose 136 percent; Lexent Inc., a telecommunications services provider, gained 70 percent; pharmaceutical company Genencor climbed 20 percent; biotech Arena Pharmaceuticals Inc. rose 39 percent; and Valicert Inc. climbed 19 percent.
But two deals struck out. Keryx Biopharmaceuticals Inc. traded barely higher while Camtek Inc. fell below its offer price.
In one of the biggest days in the new issues market, 10 deals raised $1.9 billion, according to CommScan, a New York-based investment banking research firm. The number of deals is the largest since Oct. 26, 1999, when 10 issues raised $835 million. Next week promises to be just as heavy, with 41 deals expected to raise $4.1 billion, the most on the calendar for one week since August 1996, CommScan said.
The IPO market is broadening to allow more than infrastructure-related deals to do well, Corey Ostman, co-chief executive of Alert-IPO.com, said.
"Illumina's success speaks to the whole flourishing of genomics," he said. "WebEx is a good example that Internet issues are back."
More importantly, the success of so many deals shows the strength of the IPO market as a whole, he said, even though the Nasdaq composite was slumping.
The powerful infrastructure sector
Avici Systems Inc. and Corvis Corp. are typical infrastructure deals, Irv Degraw, research director at WorldFinanceNet.com, said.
"Everyone knew they were going to do well," he said. "They both have breakthrough technology."
Avici Systems Inc. more than tripled its offer price, rising 65-3/4 to 96-3/4. Avici raised $217 million after pricing 7 million shares at $31 each, above its range, through underwriters led by Morgan Stanley Dean Witter. Avici boosted its deal to 7 million shares at $28 to $30 each from the originally filed 6 million shares at $18 to $20.
 North Billerica, Mass.-based Avici Systems (AVCI: Research, Estimates) develops and sells high-speed data networking equipment lets communication service providers send high volumes of data across their fiber-optic networks.
Avici's Terabit Switch Router lets users increase network capacity without stopping performance, manages high volume of traffic, and prioritizes types of Internet traffic.
Avici began selling the TSR product in the fourth quarter of 1999 but had only one customer in the first quarter of 2000. Enron Broadband Services and Williams Communications Inc. (WCG: Research, Estimates) have agreed to buy the product in the future while AT&T Corp. (T: Research, Estimates) has selected TSR for field trials.
Corvis Corp. more than doubled, rising 48-23/32 to 84-23/32. Corvis raised $1.13 billion after pricing 31.615 million shares at $36 each, above its range. The company had boosted its deal to 27.5 million shares at $28 to $30 each, up from the originally filed $13 to $15.
Columbia, Md.-based Corvis Corp. (CORV: Research, Estimates) makes optical switching equipment that let service providers create an all-optical backbone network. Users can send data over long distances while cutting costs and increasing network capacity.
Founded in 1997, Corvis has only three customers -- Broadwing Communications Inc., Williams Communications and Qwest Communications (Q: Research, Estimates), but competes with heavyweights such as Alcatel (ALA: Research, Estimates), Cisco Systems (CSCO: Research, Estimates), Lucent Technologies (LU: Research, Estimates), NEC Corp. (NIPNY: Research, Estimates) and Nortel Networks.
After the IPO, Corvis CEO David Huber will own 28.4 percent, venture capital firm Kleiner Perkins Caufield & Byers will hold a 10.4 percent stake, Cisco Systems will have 5.4 percent, and MeriTech Capital Associates will have 5.2 percent.
Illumina lights up
Illumina Inc. more than doubled its offer price, rising 23-11/64 to 39-11/64. The company raised $96 million after pricing 6 million shares at $16 each, above its range, through underwriters led by Goldman Sachs.
San Diego-based Illumina (ILMN: Research, Estimates) develops tools for large-scale genetic variation and function that can be used to improve drugs and therapies, customize diagnoses and treatments, and cure disease.
The two-year-old company has generated revenue primarily with grants from the National Institutes of Health. Illumina has struck a partnership with PE Biosystems Group (PEB: Research, Estimates) and research collaborations with Dow Chemical (DOW: Research, Estimates), Third Wave Technologies and PyroSequencing. The company expects to produce commercial products from its PE Biosystems deal in 2001.
Meetings online
WebEx Inc. climbed 19-1/16 to 33-1/16, raising $49 million after pricing 3.5 million shares at $14 each, the top of its range, through underwriters led by Goldman Sachs.
San Jose, Calif.-based WebEx (WEBX: Research, Estimates) provides interactive multimedia communication services. WebEx let users conduct meetings and share software applications, documents over the Web using a standard browser.
Customers include Hoover's Online, Juniper Networks (JNPR: Research, Estimates), ABN Amro Holdings N.V. (ABN: Research, Estimates) and W.R. Hambrecht & Co. WebEx has struck distribution agreements with Deutsche Telekom (DT: Research, Estimates), Global Crossing and Compaq Computer (CPQ: Research, Estimates).
Biotech and drugs
Arena Pharmaceuticals Inc. rose 7 to 25. Arena raised $108 million after pricing 6 million shares at $18, above its range, through underwriters led by ING Barings.
San Diego-based Arena Pharmaceuticals (ARNA: Research, Estimates) uses its technology, CART, to more quickly identify new drug candidates. The company has discovered new drugs for obesity and schizophrenia.
Since its founding in 1997, the company has devoted most of its resources to developing CART and has accumulated a deficit of $17.5 million. The company has formed partnerships with Eli Lilly & Co. (LLY: Research, Estimates), Taisho Pharmaceutical Co., Fujisawa Pharmceutical Co., Lexicon Genetics Inc. and Neurocrine Biosciences Inc.
Genencor International Inc. rose 3-5/8 to 21-5/8. It raised $126 million after pricing 7 million shares at $18 each, the top of its range, through underwriters led by Merrill Lynch.
Palo Alto, Calif.-based Genencor International (GCOR: Research, Estimates) develops genetically based biotechnology products for the industrial chemical, agriculture and health-care markets. Genencor plans to use its technology to design and develop vaccines, protein-based pharmaceuticals and foods with enhanced nutritional value.
Genencor has struck alliances with Procter & Gamble Co., E.I. du Pont de Nemours and Co. and Eastman Chemical Co. (EMN: Research, Estimates) Customers include Benckiser N.V., Cargill Inc. and Unilever NV (UN: Research, Estimates).
Telecommunications and software
Telecommunications services provider Lexent Inc. closed trading rose 10-9/16 to 25-9/16 after raising $90 million. Lexent priced 6 million shares at $15 each, above the range, through underwriters led by Credit Suisse First Boston. Lexent originally had filed 5.8 million shares at $12 to $14 each.
New York-based Lexent (LXNT: Research, Estimates) provides outsourced local telecommunication services for customers such as Winstar Communications (WCII: Research, Estimates), WorldCom Inc. (WCOM: Research, Estimates) and AT&T. Lexent services let clients build and connect their networks to other local and long-distance carriers and to individual users.
Valicert Inc. closed up 1-7/8 to 11/7/8. Valicert raised $40 million after pricing 4 million shares at $10 each, the bottom of its range, through underwriters led by DB Alex. Brown.
Mountain View, Calif.-based Valicert (VLCT: Research, Estimates) provides infrastructure software and services that let customers such as Dell Computer, Aetna Insurance and Visa International conduct secure transactions over the Internet.
Questionable
Keryx Biopharmaceuticals Inc. edged up 1/16 to 10-1/16. The company raised $46 million after pricing 4.6 million shares at $10 each through underwriters led by Roth Capital Partners.
Har Hotzvin, Israel-based Keryx (KERX: Research, Estimates) generates drug candidates from data gleaned from mapping of the human genome. Keryx targets specific portions of the protein kinases, which play a key role in how cells communicate, and has produced 13 drug compounds. However, none of the company's drug candidates has been approved for sale in any market.
Shares of Camtek Inc. closed down 1 at 6.
Midgal Haemek, Israel-based Camtek (CAMT: Research, Estimates) raised $39.2 million after pricing 5.6 million shares at $7 each, below its range, through underwriters led by CIBC World Markets. Camtek develops equipment that is used to detect problems in printed circuit boards during manufacturing. 
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