The acquisition represents a big bet by Foster City, Calif.-based Gilead, the largest HIV drug maker, on hepatitis C treatments, which is a major focal point of Pharmasset.
Gilead said it will pay $137 a share in cash for Princeton, N.J.-based Pharmasset, marking an 89% increase from its closing price on Friday.
“This transaction will serve to drive the long-term growth of our business, and we look forward to working closely with the Pharmasset team to advance a broad clinical program in HCV to address the unmet needs of patients and the medical community,” Gilead CEO John Martin said in a statement.
The acquisition, which is seen closing in the first quarter, is expected to hurt Gilead’s bottom line through 2014, but add to it starting in 2015 by an unspecified amount.
Shares of Pharmasset surged 85.72% to $134.96. They had already been up 233% on the year as of Friday.
“We are excited to join together with Gilead, which shares our commitment to providing HCV patients with new, highly efficacious and safe oral therapies,” said Pharmasset CEO Schaefer Price.
Gilead’s shares slumped 7.3% to $36.87 in early trade.