The speculation of another hepatitis C-related acquisition took off Monday afternoon, sparked by a rumor that Gilead executives canceled a scheduled Tuesday presentation at a health care investor conference. Earlier Monday, Achillion Pharmaceuticals cancelled its presentation at the same investor conference.
You see where this is going. Gilead and Achillion must have bowed out of the investor conference because the companies were about to announce a deal for the hepatitis C juggernaut (Gilead) to buy out its smaller competitor (Achillion).
A compelling theory, but like most M&A rumors, it was a false one. Before the market closed Monday, a Gilead spokesperson said executives were still scheduled to speak publicly on Tuesday. The conference cancellation rumor was, itself, cancelled.
A good market rumor needs a modicum of plausibility to be truly fun. A Gilead takeout of Achillion is not entirely ridiculous, just highly unlikely. Gilead is already dominating hepatitis C with its two-drug, single-pill therapy Harvoni, but the company continues to pursue development of follow-on drugs to improve cure rates and shorten treatment duration.
Achillion is the Lil' Orphan Annie of Hep C. The company is developing some interesting drugs on its own but needs a Daddy Warbucks to find them a proper home. Idenix Pharmaceuticals was in a similar situation until the company was "adopted" by Merck (MRK). The adoption, in this case, cost $3.8 billion.