Gilead Sciences is buying Pharmasset for almost $11 billion. And the $137-per-share price is almost a 90% premium to Pharmasset’s closing price Friday. So what’s behind the price tag Leerink Swan analyst Joshua Schimmer describes as “lofty”? Well, it’s hepatitis C. As the WSJ reports , the market for treating the disease is heating up, with new treatments from Vertex Pharmaceuticals and Merck out this year. Decision Resources has predicted the market for hepatitis C drugs will grow to $16 billion in 2015 from $1.7 billion last year, according to the paper. With Pharmasset, Gilead hopes to get a chunk of those sales. Pharmasset is developing hepatitis C drugs including PSI-7977 , which stands to “become part of the first all-oral regimen” for the disease, the WSJ reports. It could be approved in 2014. Gilead is known mostly for its HIV treatments; it was developing its own hepatitis C candidate, similar to PSI-7977, but executives tell the WSJ it wasn’t doing as well in testing as the Pharmasset candidate. But the market for new drugs is a competitive one. The WSJ reported last year that there were 30 therapies from more than a dozen companies under development. And as the Health Blog has reported , it will take more

than new treatments — even highly effective ones — to wipe out the infectious disease. Most of the estimated 4 million infected Americans don’t know they have the virus, according to experts. The bloodborne disease can linger in the body for decades before causing life-threatening health effects like liver failure or liver cancer. (That means baby boomers who engaged in risky behavior like IV drug use during their errant youths may only now be experiencing the consequences, as the WSJ has reported .) So people will have to get tested for the virus, which is now not routine, in order to take advantage of the new treatments coming down the pike. That explains an awareness campaign from Vertex that urges certain people — including boomers, those who have experimented with drugs and those who had a blood transfusion or organ transplant before 1992 — to get tested. The United States Preventive Services Task Force recommends against routine testing in normal-risk adults and says there’s not enough evidence to weigh the benefits of screening in high-risk people. But those recommendations were last updated in 2004, way before the newer, more effective therapies hit the market. Image: iStockphoto

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The Disease Behind an $11-Billion Pharma Deal