Merger and Acquisition Activity Expected to Rise in 2013 as Big Pharma Companies Flush With Cash

NEW YORK, NY -- (Marketwire) -- 01/14/13 -- 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 AEterna Zentaris Inc. (NASDAQ: AEZS) and BioCryst Pharmaceuticals, Inc. (NASDAQ: BCRX).

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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 annuals 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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AEterna Zentaris pipeline encompasses compounds at all stages of development, from drug discovery through to marketed products. The company was recently granted a Special Protocol Assessment for an upcoming Phase 3 registration trial in endometrial cancer with AEZS-108. "AEZS-108's innovative targeted approach could offer a new treatment option for women with endometrial cancer and provide the Company with a significant market opportunity." stated Juergen Engel, PhD, President and CEO.

BioCryst designs drug candidates using detailed knowledge of the structures of active sites of targeted enzymes. The active site of an enzyme is the area into which a chemical or biological molecule fits to initiate a biochemical reaction. The company currently has two late-stage programs: peramivir, a viral neuraminidase inhibitor for the treatment of influenza, and ulodesine (BCX4208), a purine nucleoside phosphorylase inhibitor for the treatment of gout.

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