Achillion Pharma, Too Much of a Good Thing After 50% Gain? (ACHN, MRK, GILD, VRUS, BMY, INHX, VRTX)

Achillion Pharmaceuticals, Inc. (NASDAQ: ACHN) has been on fire due to the rapid interest of hepatitis C treatments and the bidding of players in the sector.  With Merck & Co. (NYSE: MRK) driving further interest because of saying it was willing to buy an industry leader in the field, Achillion is now up by about half.

Gilead Sciences Inc. (NASDAQ: GILD) has a deal to acquire Pharmasset, Inc. (NASDAQ: VRUS) and Bristol-Myers Squibb Co. (NYSE: BMY) is in a pact to acquire Inhibitex, Inc. (NASDAQ: INHX).  Both were super-premium deals.

Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) has an approval already and that has its value around $7.5 billion versus an expected $1.4 billion in 2011 sales and $2.52 in expected 2012 sales.  With that market value it seems that they will be on their own.

It is important to realize that Achillion has no expected revenues for the foreseeable future and it is now valued at $840 million.  Now that shares are above $12.00 and at a new 52-week high, Achillion is virtually up 50% in the last two trading sessions.

It is fair to at least ask if this is now too much of a good thing.  Stock options trading volume has not exactly been off the charts in this issue.

JON C. OGG

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