There are a finite number of biotech companies developing drugs. I know of about 250 or so that trade on one of the major U.S. exchanges. This universe of biotechs slowly churns as the big drug companies pick off some of the more promising prospects, such as Ilex Oncology (NASDAQ:ILXO) and Esperion. Ready to replace them are numerous private drug developers working toward prime time.

Within the past few months, a number of these private biotechs have gone public. This is exciting since it provides the opportunity to take a look at companies that were previously unknown entities. It's almost the investor's equivalent of opening Christmas gifts. Perhaps even a select few of these companies will move on to become notable leaders in the future.

I am going to review eight of these IPO companies over the next two articles. Today, I'll cover the first four, and next week's article will have the second batch. When I was looking into these companies, I was pleasantly surprised at the overall quality. I wasn't sure how mature they would be, but in fact some of them are closer to a real product than many public biotechs have been for years. The general theme among these eight companies is an emphasis on late-stage product development, otherwise known as having a business model.

Hepatitis or bust
 Anadys Pharmaceuticals (NASDAQ:ANDS) is developing drugs for hepatitis B and hepatitis C viral infections. Hepatitis C in particular is always an indication that grabs my attention for several reasons. It affects a large number of people, is fatal if treatment fails, and a large percentage of patients do not respond to standard therapy. Therefore, it represents an attractive market opportunity for a drug developer.

Anadys' lead drug for hepatitis C is Isatoribine, a drug that activates the immune system and, hopefully, will result in an enhancement of the body's ability to eliminate the virus. It should be noted that drugs currently used to treat hepatitis C work indirectly though the immune system and do not directly target the virus itself. Isatoribine is in early clinical trials, so it will be some time before there is sufficient clinical data available to assess the product.

The hepatitis B program seems to be a little further along in clinical development with the drug LB80380 in phase 2 trials. This is a drug that Anadys intends to license from a Korean biotech called LG Life Sciences. Early clinical data was presented at a scientific meeting last December.

Cancer treatment hopeful
 CancerVax (NASDAQ:CNVX), as the name suggests, is developing a drug for the treatment of cancer. The drug CancerVax is developing is called Canvaxin, a cancer vaccine strategy in which irradiated cancer cells are injected into the body. The goal is to get the immune system to recognize the tumor as something that should be eliminated. Historically, cancer vaccines have not been successful, but the early clinical data from Canvaxin trials looks encouraging.

Canvaxin is pretty far along in clinical development, with two phase 3 trials in patients with ongoing melanoma. The goal of these trials is to see if Canvaxin can increase survival in patients with advanced melanoma who have had their tumors surgically removed.

In drug development terms, the timeline for finding out whether or not Canvaxin works should not be that far off. The first phase 3 trial should have all of the patients enrolled this summer, and the second trial will be fully enrolled in about a year. Retrospective analyses -- which should not be considered very rigorous -- of the phase 2 data suggest that Canvaxin does indeed increase patient survival, so it will be interesting to see if this effect is confirmed in prospective phase 3 studies.

In addition to melanoma, the company is also designing a pivotal phase 2 trial of Canvaxin in the treatment of advanced colorectal cancer. This trial is scheduled to start this summer.

Vision of the future
 Eyetech Pharmaceuticals (NASDAQ:EYET) is developing a drug for the treatment of, you guessed it, diseases of the eye. Its lead drug, Macugen, is very far along in clinical development, with two phase 2 and 3 clinical trials ongoing. In these trials, Macugen is being tested for the treatment of wet age-related macular degeneration (AMD).

AMD is the leading cause of vision loss and blindness in patients over 50. Growth of abnormal blood vessels in the retina is the cause of this disease. The vessels leak fluid and cause scar tissue that result in deterioration of sight. Macugen can potentially treat this disease, as it is designed to block the function of vascular endothelial growth factor (VEGF). VEGF is known to play a role in blood vessel growth. Perhaps by blocking this activity with Macugen, the abnormal blood vessel growth in AMD can be halted, preventing blindness from occurring.

I'd like to note that this drug is administered through an injection directly into the eye. I can't imagine many experiences worse than a poke in the eye, but since going blind is no fun either, this is probably OK.

If Macugen is approved, it would be competing with Visudyne from QLT (NASDAQ:QLTI) and Novartis (NYSE:NVS). Visudyne is a very successful drug that will have over $400 million in sales this year.

Estrogen's many possibilities
 GTx (NASDAQ:GTXI) has drugs in its pipeline that are being assessed in the treatment of cancer and side effects related to cancer therapies in men. The lead drug, Acapodene, is a selective estrogen receptor modulator (SERM). Those who follow Ligand Pharmaceuticals (NASDAQ:LGND) will be very familiar with this class of drug. In general, these drugs are designed to stimulate or block estrogen activity in different tissue types. For example, a drug like tamoxifen blocks the activity of estrogen in the breast, so it is used in the treatment of breast cancer. Additionally, this class of drug stimulates bone growth, so a drug like Eli Lilly's (NYSE:LLY) Evista is used in the treatment of osteoporosis.

Acapodene is in a phase 2b trial for reducing the risk of prostate cancer in men who have precancerous lesions of the prostate. Patients with these lesions have a high risk of developing prostate cancer. The goal of this study is to see if blocking the effect of estrogens in the prostate will decrease the rate at which these men develop prostate cancer. This study is expected to finish soon.

In November 2003, GTx initiated a pivotal phase 3 trial of Acapodene in the treatment of side effects from androgen deprivation therapy. Testosterone is known to stimulate the growth of prostate cancer cells, so drugs such as Abbott Laboratories' (NYSE:ABT) Lupron are used to lower testosterone levels. Since testosterone is an important hormone, decreasing its levels comes with side effects, which can include bone loss, muscle weakness, and hot flashes. Phase 2 data suggests that Acapodene can increase bone density and reduce the incidence of hot flashes. An interim analysis of the phase 3 study is expected in the first half of next year.

Now what?
Charly Travers is this month's guest analyst in Motley Fool Hidden Gems. Get your free trial now. Share your thoughts on these companies -- and any other biotech issue -- on our Biotechnology discussion board. And look for more biotech IPOs in part two of this article next week.

Fool contributor Charly Travers does not own shares of any of the companies mentioned in this article. The Motley Fool is investors writing for investors.