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NEW YORK (TheStreet) -- Most investors probably believed hepatitis C deal making was done, but not so, as Merck (MRK) - Get Merck & Co., Inc. Report surprised many folks Monday morning by announcing plans to acquire Idenix Pharmaceuticals (IDIX) for $3.85 billion. 

The all-cash deal values Idenix at $24.50 per share, or more than three times the stock's Friday close of $7.23 per share. 

With Gilead Sciences (GILD) - Get Gilead Sciences, Inc. Report already marketing the hepatitis C pill Sovaldi and competition from Abbvie (ABBV) - Get AbbVie, Inc. Report-Enanta Pharma (ENTA) - Get Enanta Pharmaceuticals, Inc. Report and Bristol-Myers Squibb (BMY) - Get Bristol-Myers Squibb Company Report close behind, a lot of investors believed the hepatitis C drug race had transitioned to marketing and away from M&A. But Merck chief scientitist Roger Perlmutter is no dummy, so his decision to spend almost $4 billion on Idenix says the hepatitis C treatment market may have a much longer tail than many believed. 

In an interview with Forbes, Perlmutter said the future of hepatitis C therapy is triple-drug combinations that may reduce the duration of treatment from two months with Gilead's treatments to as little as one month. "Let's recognize that there are on the order of 170 million people who have hepatitis C infection," Perlmutter told Forbes. "You're not going to treat a substantial fraction of the world's infections in a few years. It's just impossible."

Merck's existing hepatitis C drug pipeline includes MK-5172 and MK-8472. Acquiring Idenix adds three more hepatitis C drugs, including IDX2147, IX21459 and samatasavir. Merck's stated goal is to develop a single-pill, once-daily therapy against all subtypes of hepatitis C. 

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The $3.85 billion acquisition is an amazing comeback story for Idenix, which has faced considerable setbacks in recent years dealing with delays and FDA-ordered clinical holds on some of its older hepatitis C drugs. But throughout the disappointments, Idenix CEO Ron Renaud has been steadfast in his belief that Idenix still had a role to play in hepatitis C drug development. "I know there's a perception that we're late to [hepatitis C] but the market will take a long time to play out and there will be plenty of room to operate when we get there," said Renaud last January, after raising more than $100 million from Boston-based hedge fund, The Baupost Group.

On Monday, Renaud, his employees and shareholders couldn't agree more. 

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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