Record Levels of Available Cash and Moderate R&D Development Will See Big Pharma M&A Activity Increase in 2013
Five Star Equities Provides Stock Research on Achillion Pharmaceuticals and Dendreon
NEW YORK, NY -- (Marketwire) -- 01/09/13 -- Lost revenues from expiring patents has played a major part in the Biotech Industry's success in recent years. A total of 676 takeovers of biotechnology and pharmaceutical companies have occurred in the past three years, with an average premium of 38 percent, according to data collected by Bloomberg. Five Star Equities examines the outlook for companies in the Biotech Industry and provides equity research on Achillion Pharmaceuticals, Inc. (NASDAQ: ACHN) and Dendreon Corporation (NASDAQ: DNDN).
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At the end of the third quarter five of the biggest drug makers in the U.S. held over $70 billion in cash, near cash and short-term investments. Major revenue losses from patent expirations have forced big pharmaceutical companies to look to biotech companies to help fill the void. Pfizer's Lipitor and Bristol-Myers' Plavix, which lost exclusivity in late 2011, had combined annual revenues of $17 billion at their peaks.
"We're through many cost-cutting programs, restructurings and portfolio arrangements," said Henry Gosebruch, Managing Director, Mergers & Acquisitions J.P. Morgan. "When you put that together with record levels of cash available and improving, but still moderate R&D productivity, we think there will be more big pharma M&A activity in 2013."
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Achillion is an innovative biopharmaceutical company dedicated to bringing important new treatments to patients with infectious disease. The company's focus is currently on developing three clinical candidates for the treatment of chronic hepatitis C infection.
Dendreon applies its expertise in antigen identification, engineering and cell processing to produce active cellular immunotherapy (ACI) product candidates designed to stimulate an immune response in a variety of tumor types. Shares of the company surged earlier this week after reporting net production revenues are expected to be approximately $85.5 million in the fourth quarter.
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