GILEAD SCIENCES has struck a deal to buy biotechnology company Pharmasset for about $11 billion (€8 billion) in a huge bet on the next generation of hepatitis C treatments.
Gilead, the world’s largest maker of HIV drugs, will pay $137 for each Pharmasset share, an 89 per cent premium for a company with no significant marketed products.
Pharmasset shares had already more than tripled in the past year based on the potential of its experimental hepatitis C medicines to create a new standard of care for the 180 million people worldwide infected with the serious liver disease. Pharmasset soared 85.1 per cent to $134.48 in morning trading. Shares of Gilead, which said the deal would reduce its earnings through 2014, fell nearly 11 per cent to $35.66.
Analysts questioned whether the deal price was too steep.
“It’s definitely a high-risk acquisition, but I think it could pay off in dividends for them,” said Brian Skorney, an analyst with Brean Murray, Carret Co. “Given the premium, Gilead is hoping to avoid another potential suitor.”
Mr Skorney said a competing bid could emerge. He noted that Roche has a partnership with Pharmasset. – (Reuters)
