Furthermore, as the development of such treatments advances, deals are likely to flourish as drug companies try to ensure their foothold in the marketplace.

ThinkEquity's Mr Kolbert is puzzled that large pharmaceutical makers haven't bought small drug companies developing hepatitis C treatments --such as Anadys Pharmaceuticals Inc., Achillion Pharmaceuticals Inc., and Idenix.

"Pharma seems to be waiting until they have proof of concept in hand before they make a deal," Mr. Kolbert said.