2 local companies plan IPOs this week

Two Chicago-area companies are expected to go public this week, according to Renaissance Capital, which tracks initial public offerings.

Nanosphere Inc., a Northbrook-based company that makes genetic-based diagnostic testing equipment, hopes to raise about $105 million. Shares are expected to be priced at $14 to $16 each, according to a Securities and Exchange Commission filing.

The company, which has lost money and expects losses to continue, recently received clearance from the U.S. Food and Drug Administration for its Verigene testing process and two tests using the process. Nanosphere says its technology allows multiple diagnostic tests to be run on a single sample simultaneously for diseases such as cystic fibrosis, herpes, cervical cancer, respiratory illness, recurrent prostate cancer and cardiovascular disease.

The company was founded by Northwestern University chemistry professors Robert L. Letsinger and Chad A. Mirkin in 1998. Its chief technology officer and head of research and development, William Cork, is former vice-president of research and development at Baxter International Inc.

Neutral Tandem Inc., which connects calls between competing phone networks less expensively than using local phone companies, also is going public this week. Instead of phone companies setting up their own switches with each local network, Neutral Tandem sets up switches that connect to multiple networks. Last year, the company earned $4.7 million on revenue of $52.9 million.

Chicago-based Neutral Tandem, founded in 2004, hopes to raise about $75 million, selling 6.25 million shares at $11 to $13 each, according to an SEC filing. Backers include Chicago-based Mesirow Capital Partners; DCM, a venture fund based in Menlo Park, Calif.; and New Enterprise Associates, a Maryland-based venture capital firm that also backed Holmdel, N.J.-based Vonage Holdings Corp.

If the IPOs are completed, it would bring this year’s total to four, equaling last year’s count, according to research firm Dealogic. Orbitz Worldwide Inc. and Trans-India Acquisition Corp. are the others.

“I think it’s a very good time to go public in the sense that from a historical level, the market’s quite hot," said Tim Loughran, a finance professor at the University of Notre Dame who studies IPOs.

The Nasdaq is up 3% since Oct. 19.

"These aren’t banks going public — that’s where the uncertainty would be. The tech companies are doing great.”

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