Many still confuse biotech and pharmaceutical companies, and lump them together under the biotech label. If in a company’s prospectus, it calls itself pharmaceutical or biopharmaceutical and the SEC assigns the Standard Industrial Classification Code number of 2834 (pharmaceutical), then it just might be a pharmaceutical company. In short, if it waddles like a duck and quacks like a duck, it probably IS a duck. It certainly isn’t a chicken.

Fourteen pharmaceutical companies have filed plans to go public so far in 2003. Only five have made it to market. One IPO was postponed, one company withdrew plans to go public, and the rest are sitting on the sidelines like wallflowers at a school dance waiting for an invitation to step out on the dance floor.

The first pharmaceutical company to file for an IPO this year was Acusphere (ACUS: chart). That was July 1, 2003. Accusphere is a Massachusetts-based specialty pharmaceutical firm with lots of hope, but no revenues. Acusphere was also the first pharmaceutical company to go public this year. That was on Oct. 7, 2003. The IPO was priced at $14 a share on Oct. 7, 2003. It closed Friday, Dec. 5, 2003, at $8.48 a share –- down 39.4 percent from its initial offering price. Regrettably, that set the tone for those that followed.

The other four were:
* Advancis Pharmaceutical (AVNC: chart) closed Friday, Dec. 5, 2003, at $8.04 share -- down 19.6 percent from its initial offering price of $10 a share.

* Myogen (MYGO: chart) closed Friday at $13.79 share -- down 1.5 percent from its offering price of $14 a share.

* NitroMed (NTMD: chart) closed Friday at $8.40 share --- down 23.6 percent from its offering price of $11 a share.

* Pharmion (PHRM: chart) closed Friday at $14.53 share -- UP 3.8 percent from its offering price of $14 a share.

As of Friday, Dec. 5, 2003, the IPO Pharmaceutical Scorecard of 2003 read: One up and four down with an average loss of 15.5 percent each.

Compare this with the 2003 IPO Scorecard of all 62 IPOs, which include the five pharmaceuticals: 47 up and 15 down with an average gain of 26.2 percent each.

The first thing needed to have any kind of an IPO market is a bullish stock market. Once that is in place, the new-issues calendar is filled up with companies from strong industrial sectors.

IPO fish do not swim upstream.

The aftermarket performance of this year’s pharmaceutical IPOs underscores this fact.

The DJ Pharmaceutical Index closed Friday, Dec. 5, 2003, at 273.69. That was down 10.3 percent from its June 17, 2003, close of 305.08 -– its closing high for 2003 and its highest close in the past 52 weeks. The index’s close on Dec. 5, 2003, of 273.69 also was down 0.2 percent from its close 52 weeks ago of 278.20 on Dec. 6, 2002.

Compare this with the Nasdaq Composite Index. The Nasdaq Composite closed Friday, Dec. 5, 2003, at 1,937.82. That was up 16.1 percent from its June 17, 2003, close of 1,668.44, and up 36.2 percent from its close 52 weeks ago of 1,422.44.

You don’t need to have M.D., or even M.B.A. after your name to discern that the DJ Pharmaceutical Index looks anemic, compared with the Nasdaq. In this case, the tape tells the story.