Investopedia: Bristol-Myers Pays To Patch Up A Gap

Companies developing treatments for Hepatitis C were the hottest story in biotech for 2011, and at least some of that momentum has spilled over into 2012. Bristol-Myers Squibb (NYSE:BMY) won a competitive bidding process for Inhibitex (Nasdaq:INHX) and will be acquiring this small early-stage biotech for $2.5 billion in cash.

The Deal
The two companies announced this deal over the weekend, whereby Bristol-Myers will buy Inhibitex for $2.5 billion, or $26 per share, in cash. This valuation offers a 163% premium to Friday's close for Inhibitex shareholders and a close to an incredible run that began at less than 25 cents per share in early 2009. Although this offer is lower than Gilead's (Nasdaq:GILD) $11 billion bid for Pharmasset (Nasdaq:VRUS), Pharmasset has more drug candidates in its pipeline and is further along in clinical trials. (For related reading, see Biggest Merger And Acquisition Disasters.)


Read more here:
http://stocks.investopedia.com/stock-analysis/2012/Bristol-Myers-Pays-Up-To-Patch-A-Gap-BMY-INHX-GILD-IDIX-ACHN0109.aspx

Investopedia: The Top Biotech Performers of 2011

This has really been a year of the "haves" versus the "have nots" in biotechnology. Although a few dedicated biotech ETFs have done rather well and there have been some huge individual outperforming stocks, the sector as a whole has not necessarily been all that strong. Still, for those companies that could deliver encouraging data, particularly in the fields of hepatitis and cancer, the market was more than willing to reward the stocks with a higher valuation.


Hepatitis C - The Story of 2011
If any one theme should leap out at biotech investors in 2011, it is the explosion of interest in companies targeting hepatitis C. It is not as though hepatitis C is a new disease, but a host of companies have finally developed compounds that look to offer major improvements in disease management and quality of life for the millions of people with this condition.

Two of the top three performing biotechs with current market capitalizations above $250 million are hepatitis C plays. Pharmasset (Nasdaq:VRUS) has delivered the sort of year that biotech investors dream about for 2011, with the stock up nearly 500% in the last year. The stock was already doing incredibly well on the basis of very strong clinical data in PSI-7977 trials - data that basically showed 100% response in early administration of the drug. This stock found another level, though, when Gilead Sciences (Nasdaq:GILD) stepped up and offered to pay a considerable premium to acquire the company.


To read the full article, click here:
http://stocks.investopedia.com/stock-analysis/2011/The-Top-Biotech-Performers-Of-2011-INHX-MDVN-ONTY-ARIA1216.aspx

Investopedia: Is Third Time The Charm For Gilead?

When in doubt, buy somebody out. Gilead Sciences (Nasdaq:GILD) has been trying for quite some time to diversify its business beyond HIV therapy. With November 21, 2011's announcement of a massive deal for biotech Pharmasset (Nasdaq:VRUS), Gilead is making a bold move for dominance in hepatitis C and perhaps acknowledging its own shortcomings. The real question for shareholders, though, is whether the extreme competition in the Hep C market will whittle away the value of Pharmasset's pipeline and make this yet another expensive blunder by Gilead management.

The Terms of the Deal  
Gilead announced on November 21, 2011 that it will acquire Pharmasset for $11 billion in cash, valuing Pharmasset at $137 per share in cash. That price is an 89% premium to November 18, 2011's close and makes Pharmasset nearly twice as valuable as Vertex (Nasdaq:VRTX) - a biotech with an interesting new hepatitis C drug already on the market, but one recently beset by worries of prescription trends and future competition.

Read the full piece here:
http://stocks.investopedia.com/stock-analysis/2011/Is-Third-Time-The-Charm-For-Gilead-GILD-VRUS-VRTX-JNJ-MRK-ACHN-INHX-BMY-GSK1122.aspx