SOURCE: Five Star Equities

Five Star Equities

January 31, 2013 08:20 ET

Biotech Companies Attractive Targets for Pharmaceutical Companies Looking to Replace Lost Revenues

Five Star Equities Provides Stock Research on Inovio Pharmaceuticals and Ventrus Biosciences

NEW YORK, NY--(Marketwire - Jan 31, 2013) - Lost revenues from expiring patents have 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 Inovio Pharmaceuticals, Inc. (NYSE: INO) and Ventrus Biosciences Inc. (NASDAQ: VTUS).

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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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Inovio's platform is applicable to cancers and infectious diseases. To date, the company has developed vaccine product candidates for cervical dysplasia/cancer, prostate cancer, hepatitis C virus, HIV, influenza, malaria and tropical diseases. Earlier this month Inovio reported that it plans to initiate a clinical trial for its Hepatitis C vaccine, INO-8000, later this year.

Ventrus Biosciences is a development stage specialty pharmaceutical company focused on the development of late-stage prescription drugs for gastrointestinal disorders, specifically anal fissures and fecal incontinence. The company's product candidate portfolio consists of two late-stage drugs intended to treat these conditions.

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