INDIANAPOLIS — HIV drugmaker Gilead Sciences will spend about $11 billion to buy Pharmasset in what one analyst termed an “amazing risk,” a high-stakes gamble that could yield billions of dollars in drug sales if a possible groundbreaking hepatitis C treatment pans out.
Gilead said Monday that it will pay $137 a share in cash for Pharmasset, a Princeton, N.J., company with no products on the market and a stock that has traded as low as $20.49 in the past year. The announcement sent Gilead’s stock tumbling and Pharmasset’s soaring.
Analysts see promise in Pharmasset’s lead candidate, a pill labeled PSI-7977 that has just started late-stage testing. They say it could become a preferred option for care if it works without the injectable drug interferon, which can leave patients with flu-like symptoms that last for months.
Before the drug reaches the market, though, it must pass through the largest and most expensive stage of clinical testing and receive Food and Drug Administration approval.
Analyst Erik Gordon of University of Michigan’s Ross School of Business said the price Gilead agreed to pay multiplies the risk in that process.
“At that price,” he said, “everything had better work perfectly.”
Hepatitis C treatments represent a ripe opportunity for drugmakers. The virus can lead to life-threatening liver damage and is the main cause of liver transplants in the U.S.
It is spread through the blood, and that can happen through sharing intravenous drug needles or having sex with an infected person. The disease, which can take years to manifest, also could be picked up from blood transfusions before 1992, when the blood supply began being tested for the virus.
