Gilead Sciences to Acquire Pharmasset (GILD, VRUS)

Gilead Sciences Inc. (NASDAQ: GILD), a biopharmaceutical company engaged in the development and commercialization of human therapeutics for life threatening diseases, today entered into a definitive agreement with Pharmasset Inc. (NASDAQ: VRUS) under which it acquire Pharasset for $137 per share. The transaction values Pharmasset, a clinical-stage biopharmaceutical company, at approximately $11 billion.

The Board of Directors of Pharmasset has given its nod to the transaction. Gilead will commence a tender offer to acquire all outstanding shares of Pharmasset common stock through a wholly-owned subsidiary. The offer price from Gilead represents a premium of 89% over Pharmasset shares’ closing price on Friday, the last trading day before the deal was announced. Gilead plans to finance the transaction with cash on hand, bank and senior unsecured notes. The transaction is expected to be dilutive to Gilead’s earnings through 2014 and accretive in 2015 and beyond.

Foster City, California-based Gilead has made a number of acquisitions since 2006. However, the acquisition of Pharmasset is by far the biggest takeover in the company’s history. Pharmasset, which is based in Princeton, New Jersey, is engaged in clinical stage oral treatments of hepatitis C. The company also makes other drugs like Racivir, which is a treatment for HIV. Gilead, which also has a number of hepatitis C treatments, believes that Pharmasset’s products are complementary to its own.

Commenting on the transaction, John C. Martin, Chairman and CEO of Gilead, said that the acquisition of Pharmasset represents an important and exciting opportunity to accelerate Gilead’s effort to change the treatment paradigm for HCV-infected patients by developing all-oral regimens for the treatment of the disease regardless of viral genotype. Martin further said that Pharmasset presented compelling Phase 2 data earlier this month further emphasizing the strong efficacy and safety profile of its PSI-7977.

Gilead shares are sinking following the announcement of the acquisition. At last check, Gilead shares were down 10.41% to $35.73. Pharmasset shares, meanwhile, are currently trading 85.06% higher at $134.48.

More Posts by this author

• 
  Gold Prices Rebound after Monday’s Sell-Off
• 
  Stocks End Lower
• 
  Stocks Headed for Another Lower Finish after Q3 GDP Growth is Revised Downwards
• 
  Brown Shoe Plans to Shed Some Brands (BWS)
• 
  Groupon Shares Slip for a Second Straight Day (GRPN)
• 
  Samsung In Final Stage Discussions to Launch Google TV
• 
  J.P Morgan Launches Chip Based Credit Cards

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.