While private equity runs from companies in some sectors, the buyout frenzy in the pharmaceutical sector looks like it still has legs.

Last week, Canadian specialty pharma Axcan Pharma (NASDAQ:AXCA) became the latest drugmaker to be acquired by a private equity group -- for $1.3 billion in cash. The deal, valued at $23.35 per share, is a 28% premium to Axcan's average share price the day before the deal was announced.  

Axcan focuses mainly on marketing niche gastroenterology drugs throughout the world. Sales for its just-ended fiscal 2007 were $349 million, up 19% year over year; earnings per share were $1.33 in that time frame.

Besides its growing top and bottom lines, Axcan also has a relatively strong pipeline for a drugmaker of its size, with several compounds in mid- and late-stage testing. In addition, its antibacterial drug Pylera recently entered the market in the U.S. after gaining approval in September 2006.

Lately, not a week has gone by that another drugmaker hasn't been gobbled up by a large pharma or publicly put itself up for sale (see MGI Pharma (NASDAQ:MOGN) or Biogen Idec (NASDAQ:BIIB)).

The Axcan deal shows that the large pharmas desperately trying to replenish their pipelines via acquisitions are not only bidding among themselves for drug assets, but also against sources outside the industry. It looks like Carl Icahn isn't the only outside investor trying to make drug deals happen -- like AstraZeneca's (NYSE:AZN) purchase of MedImmune -- so expect drugmaker acquisition prices to go up. 

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Biogen is an active Stock Advisor pick. This is the Fool's disclosure policy on drugs. Any questions?