NEW YORK (TheStreet) -- Big pharma buyouts have squashed talk of a biotech bubble. This morning, Forest Laboratories  (FRX) announced it would acquire Furiex Pharmaceuticals  (FURX) for about $1.1 billion, or $95 per share. Forest will pay an additional amount, up to $30 per share or $360 million, should Furiex's drug eluxadoline, a treatment for irritable bowel syndrome, receive broad approval.

The merger is the latest in a series of billion-plus biotech deals announced in the past few months. And investors on say it confirms that biotech valuations were never that frothy, as many suggested when the sector sold-off last month.

$FURX Even if milestone achieved later and deal sweetened, still gets done below top tick. Goes to show bios were priced for perfection.

- JLL IV (@TXplunger) Apr. 28 at 08:42 AM

The Furiex acquisition comes a few months after Actavis  (ACT) announced it would acquire Forest Laboratories for $25 billion in equity and cash. At the time of the announcement, Actavis said that the combined company would have annual revenues of over $15 billion in 2015. Forest made it clear that its "blockbuster" gastrointestinal drugs were a major reason for the deal.

$ACT eats $FRX who eats $FURX #biotechfoodchain

- Kevin F. (@Katsu) Apr. 28 at 07:28 AM

The Furiex purchase also comes in the wake of Pfizer's  (PFE - Get Report) pursuit of AstraZeneca  (AZN - Get Report). Pfizer management said in a press release early this morning that it attempted to acquire AstraZeneca for $76.62-per-share in January. AstraZeneca declined the offer, saying it significantly undervalued its drug pipeline. Pfizer contacted AstraZeneca management on April 26 seeking to renew merger discussions.

Investors on StockTwits say the Furiex deal is better for shareholders than AstraZeneca. Furiex stock climbed more than 30% in the pre-market to $104.50 per share. Though it pulled back slightly by 9:40 a.m. AstraZeneca climbed more than 15% this morning to top $79-per-share.

$FURX is the early winner of Merger Monday ..... $azn is a distant second, but first in terms of dollar value.

- BBolan1 (@bbolan1) Apr. 28 at 09:14 AM

Forest Labs and Actavis also edged higher on the Furiex deal news. Furiex's eluxadoline is a major reason for the enthusiasm over the deal. In February, Furiex announced the results of Phase III clinical trials of eluxadoline in which the drug helped lessen abdominal pain in IBS sufferers and controlled diarrhea. "The acquisition of Furiex builds on our growing position in gastroenterology and helps to create a leading GI company within Forest," said Brent Saunders, Forest Laboratories CEO, in a statement. "With eluxadoline, we expect to have one of the broadest product offerings for the $38 billion GI disease market."

At the time of publication the author had no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.