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THE DAY AHEAD: Drugs join sex, rock and roll on Wall Street

No one can accuse of not operating at Internet speed. The online drugstore, which first launched its store in February, will go public the week of July 26 with big-time backers such as and Rite-Aid, but only about five months of operating history.

But investors looking for their next IPO fix will gobble up shares of, which sells health, beauty, wellness, personal care and pharmacy products, is offering 5 million shares with an expected price range between $9 and $11 and trade under the proposed ticker of "DSCM." Morgan Stanley Dean Witter is the lead underwriter.

For the quarter ending April 4, the company had sales of $652,000 and a loss of $10.2 million. For the quarter ending July 4, reported sales of $3.5 million and a loss of $18.8 million. The company counted 168,000 customers as of July 4. And in one year, jumped from three employees to 245.'s initial public offering should do well based on its high-profile partnerships with Rite-Aid and (Nasdaq: AMZN). Although is well-known via its high-profile relationships some of those partnerships could limit the company.

Amazon, which owns a 50 percent stake in, can substantially limit's moves. The Amazon agreement prohibits from selling advertising to, linking our Web site to or promoting on our Web site any company that sells products or services competitive Amazon. Considering Amazon's mission to be e-tailer to the masses, the partnership could become a burden if Amazon encroaches on turf.

In June, GNC and Rite-Aid inked a 10-year pact where will be the exclusive online retailer of Rite Aid and GNC products. GNC and Rite-Aid collectively own 33 percent of

The GNC is a straightforward marketing deal, but the Rite-Aid pact is more complicated. didn't have much of a choice, but to align itself with Rite-Aid. According to Sheryl Skolnick, a health care analyst with BancBoston Robertson Stephens, needed Rite-Aid's access to third party benefit payments. Online stores were not likely to get access to the back-end systems that allow benefit payments for subscriptions. The end result? Online players such as have to partner with real-world counterparts such as pharmacy benefit management companies (PBMs).

Under the Rite-Aid deal, users can order prescriptions and pick them up at a local Rite-Aid store.

Like the Amazon partnership,'s Rite-Aid deal could be limiting. Rite-Aid is supposed to advertise, but the online retailer can't control the placement of the ads. Meanwhile, can only promote Rite-Aid online. will also have to do more wheeling and dealing, according to regulatory filings. said it expects pharmacy sales to "account for a significant percentage of our total sales." But sales will depend on the availability of reimbursement from third-party payors such as government health administration authorities, private health insurers, health maintenance organizations (HMOs), PBMs and other organizations.

The competition is also intense. won't have a free ride while real-world drugstores fumble online opportunities. CVS recently acquired and will battle

And the dance is just beginning.

"We anticipate these strategies will continue to evolve with more moves from various players expected over the coming months," said Skolnick in a recent report. "Given the size and importance of this consumer market segment, with solid growth anticipated as the population ages, we still believe there is sufficient room for multiple winning business models."