Achillion Pharma Might be Next Hep C Takeout Target

With Merck (MRK) gobbling up Idenix Pharmaceuticals (IDIX) for $3.9 billion Monday, the hepatitis C takeout speculation shifts to Achillion Pharmaceuticals (ACHN).

Johnson & Johnson (JNJ) and Abbvie (ABBV) were both reportedly interesting in buying Idenix but lost out to Merck, reports CNBC. Achillion shares are up almost 30% to $3.74 Monday as investors bet the losers in the Idenix sweepstakes may move on to the next target. 

Using the Idenix premium, an acquisition of Achillion would be considerably cheaper -- less than $1 billion at Friday's closing stock price. 

Like Idenix, Achillion has a pipeline of hepatitis C drugs. The most valuable, perhaps, is ACH-3422, a nucleotide NS5B polyermase inhibitor. The conventional thinking is that so-called "nucs" are the linchpin of hepatitis C combination therapy. Gilead Sciences'  (GILD) Sovaldi is a nuc and will likely generate $9-10 billion in sales this year. Idenix is developing a nuc, which is probably why Merck acquired the company.

Achillion's nuc is unpartnered, but for how long?

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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