Back on the 'hot' list, Achillion shares spike (yet again) on takeover talk

Ted Tenthoff, an analyst for Piper Jaffray, was clearly pumped about the prospects of an Achillion ($ACHN) buyout when a reporter from Bloomberg reached him.

"We expect the wave of consolidation to continue," he said. "Achillion is clearly a target."

That was two years ago, almost to the day. But a funny thing happened on the way to the altar, or didn't happen. Hep C deals cooled as Gilead ($GILD) streaked ahead with sofosbuvir (now Sovaldi). And Achillion ran into some severe development issues.

Merck's ($MRK) recent decision to buy out Idenix for $3.85 billion, a hefty premium, has helped reignite chatter about a deal for Achillion. And the news a few days ago that Achillion's ACH-3102, an NS5A inhibitor, did well in a small Phase II study didn't hurt.

Over just a couple of days, Achillion's stock shot up to a one-year high after UBS noted its "M&A potential." Today's news that Bristol-Myers Squibb ($BMY) won an approval in Europe for dalcatasvir in combination with Sovaldi has kept the spotlight on the hep C race. AbbVie is coming down the pike with an evidently powerful cocktail that drug payers have hoped will offer some quick relief on pricing. And a resurgent Merck promises to play catch up.

Achillion CEO Milind Deshpande

Who's dealing and who's not is the hottest subject in the financial press these days. Even Roche has made it clear with its $8.3 billion acquisition of InterMune that it is willing to pay a premium for attractive biotech assets. So every rumor of a potential takeover gets headline treatment. Achillion, with its bolt-on appeal in place, fits the bill for a buyout. And the executive team has made no secret in the past about how badly they'd like to see an auction.

Former CEO Michael Kishbauch made a habit of touting a possible buyout. And not long after Milind Deshpande took the helm last fall, he quickly reignited talk of a sale, only to watch the stock tank days later when the FDA put its NS3/4A protease inhibitor, sovaprevir, on clinical hold. The hold has been lifted and the buzz is back. 

In the meantime, Achillion's shares are back down this morning. What goes around comes around in biotech, and Achillion and its investors have been here before.