NEW YORK, NY -- (Marketwire) -- 01/23/13 -- 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 Discovery Laboratories, Inc. (NASDAQ: DSCO) and NeoStem Inc. (NYSE: NBS).
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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Discovery Labs' strategy is initially focused on the development of its technologies to improve the management of respiratory distress syndrome (RDS) in premature infants. Discovery Labs believes that its RDS product portfolio has the potential to become the new standard of care for RDS. The company has recently received a new U.S. patent for Pulmonary Surfactant Formulations.
NeoStem's multi-faceted business strategy combines a state-of-the-art contract development and manufacturing subsidiary, Progenitor Cell Therapy, LLC, with a medically important cell therapy product development program, enabling near and long-term revenue growth opportunities. The company has recently reported that it has entered into a cell therapy manufacturing services agreement with Adaptimmune.
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