BOSTON ( TheStreet) -- Semi-random thoughts and questions about hepatitis C drug stocks in the wake of Gilead Sciences ( GILD) buying Pharmasset ( VRUS) for $11 billion:

Wow, $11 billion is a lot of money, but that's what happens when you dangle a great hepatitis C drug (Pharmasset's PSI-7977) in front of a desperate buyer (Gilead.)

One of the best bio-pharma acquisitions measured by return on investment (ROI) was Gilead's $464 million purchase of Triangle Pharmaceuticals in 2003. The Triangle deal gave Gilead the HIV drug Emtriva, which when combined with Gilead's HIV drug Viread into a single pill, created Truvada. In turn, Gilead has generated tens of billions of dollars in sales from Truvada and various HIV regimens that incorporate Truvada as a backbone.

Gilead's challenge will be to convince investors that it can deliver a decent ROI with Pharmasset by spending $11 billion to acquire the asset.

One hedge fund shareholder isn't buying it. "They're dead to me," he said, in a phone call, spitting mad. With Gilead shares down 11% to $35.23, this hedge funder doesn’t appear to be a lone voice of dissent. See below for more buy-side investor reactions.

Inhibitex ( INHX) is up Monday. Achillion Pharmaceuticals ( ACHN) shares are higher too, although less so. Both companies are developing their own hepatitis C drugs and neither company has a partner yet, so no surprise that already-present speculation about M&A activity involving these two stocks is ramping even higher.

The Inhibitex buzz makes some sense because its drug belongs to the same class of nucleotide polymerase inhibitors -- "nucs" for short -- that Pharmasset is developing.

Meantime, Achillion's CEO can't seem to pass a reporter's microphone without reminding everyone that he's in "advanced talks" with potential partners or aquirers. Smart, effective bio-pharma CEOs get deals done, they don't talk about them incessantly.

Idenix Pharmaceuticals ( IDIX) shares are also up Monday on the same M&A speculation, although the stock should probably be selling off. A large part of the bull thesis on Idenix has been based on speculation that the company's intellectual property (IP) portfolio around Hep C "nucs" would allow it to demand and receive royalty payments from other companies developing similar drugs, most notably Pharmasset.

By spending $11 billion to acquire Pharmasset, however, Gilead doesn't appear to be worried at all about Pharmasset's patent position. On its conference call this morning, Gilead said it had conducted a lot of due diligence into Pharmasset's patents prior to buying the company.

Idenix is developing its own Hep C nuc, with important safety data expected early next year.

Should Gilead have bought Vertex Pharmaceuticals ( VRTX) instead of Pharmasset? With Vertex, Gilead would acquiring a wildly successful Hep C drug (Incivek) already on the market and more quickly accretive to its bottom line. Vertex has a pipeline of experimental Hep C drugs, which while not as advanced as Pharmasset's, still could deliver the much-coveted all-oral regimen companies crave.

Vertex is emerging as a pioneer in cystic fibrosis drug development, a treatment market in which Gilead already has a presence with the antibiotic Cayston.

Gilead could have probably acquired Vertex for less money than Pharmasset, on top of wringing out substantial cost savings.

As I mentioned above, some (not all) Wall Street pros are scratching their heads about the $11 billion price tag. Here's a sampling of investor reaction collected by ISI Group biotech analyst Mark Schoenebaum:

"Wayyyyyy too expensive. "This will now put off both the growth and value investor bases."

"I think this is the highest risk biotech deal I have ever seen."

"Will go down as the worst deal in the history of biotech when Pharmasset safety liability exposed in larger/longer studies..."

"Once investors get their noggins wrapped around the 'New Gilead,' they will want to buy the stock."

"A necessary step for Gilead. Unfortunately, the 12% drop in Gilead stock is not a ringing endorsement for other big pharma/biotech to do the same, although they should."

"Why oh why bet $11 billion on a small molecule for an acutely treated disease that clearly has competition coming? The stuff they could have bought for this amount of money is frightening."

"I guess Bristol-Myers Squibb ( BMY) has to settle for Inhibitex now."

"Desperate move by Gilead which shows little faith in the current HIV franchise. Poor CFO at Gilead. Three bad acquistions in a row. Sold my Pharmasset position in the pre market. Sold and short GILD. Adding Celgene ( CELG) at bargain prices."

"Fantastic deal for Gilead. Transforms the company to one with sustainable multi-billion dollar cash flow for the next 15 years. No brainer under 10x post-dilution EPS."

"Clearly someone needs to buy Inhibiex... just a matter of who & how much."

"Ton of money. . .ton of money. . .ton of money this is buy far the most ever paid for a phase 2 oral drug, just wondering how you can demonstrate a return on investment?"

"Pharmasset drugs still have development risk. Even if successful, lots of interesting regimens are being developed. Could have bought other good Hep C assets for a fraction of the price. Very expensive deal."

"Stupid!!!"

"Gilead management should lay off the sauce."

"Think it is transformative, but will take some time for current investor base to appreciate."

--Written by Adam Feuerstein in Boston.

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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; click here to send him an email.

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