Gilead Buys Pharmasset for $11 Billion

Gilead Sciences ($GILD) announced a gigantic deal today. The company will buy Pharmasset ($VRUS) for $11 billion. Gilead currently has a market value of $30 billion.

I’m guessing that Pharmasset squeezed every nickel from Gilead. The deal calls for GILD to pay $137 per share for each share of VRUS. That’s 89% more than its closing price on Friday.

So what does Pharmasset have to offer? The WSJ:

Clinical-stage drug developer Pharmasset last month reported it was further expanding a trial of its hepatitis C treatment, citing the oral drug’s rapid and consistent antiviral effects.

Gilead’s research and development portfolio includes seven unique molecules in various stages of clinical development for the treatment of the disease.

Gilead expects the deal will be dilutive to earnings through 2014 and begin adding to profit in 2015. The company expects to give further guidance after the deal closes, anticipated in the first quarter of next year.

Gilead is down about 10% today. So far, I have to agree with the conventional wisdom that this is a great fit but it’s awfully darn expensive. I really wish Gilead’s board was in my fantasy football league.

Posted by on November 21st, 2011 at 9:33 am


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