Achillion ($ACHN)
Market cap: $662 million

The scoop: No discussion about potential biotech buyout targets this year has been complete without Achillion ($ACHN). That's no surprise. After Bristol-Myers Squibb bought Inhibitex and Gilead acquired Pharmasset for a jaw-dropping $11 billion, Achillion looked like the next target on the hepatitis C list. And CEO Michael Kishbauch has been making the rounds at investor conferences, all but asking for bids that would "put a silly grin on all our faces." The big question seemed to settle on what kind of premium investors could expect, and the stock gyrated on the speculative feast of rumors.

Merck ($MRK), Roche ($RHHBY) and Vertex ($VRTX), which has been playing catch-up with an asset in-licensed from Alios, have all been mentioned as possible players, whetting the prospect of a bidding war as players try to close in on Gilead ($GILD) and Abbott ($ABT), leaders in the hep C race.

Setbacks for contenders have had a sobering effect on the hep C party. Bristol-Myers' big program--BMS-094, the old INX-189--collapsed in spectacular style, wiping out much of the $2.5 billion investment it had made only months earlier in Inhibitex. The FDA put a clinical hold on Idenix's program, quashing buyout talk focused on that developer. And buyers can't ignore these events.

That may not be such a bad thing. If companies are more cautious about paying big numbers to get a better horse in the hep C race, a deal could take shape. Early next year Achillion is expected to report out data on its combo of its protease inhibitor sovaprevir (ACH-1625) and the NS5A inhibitor ACH-3102. And the round of rumors could start all over again if 2013 looks like a positive catalyst year.

For more:
Achillion heralds upbeat hepatitis C results as it rushes through Phase II
Achillion Pharma strikes deal to raise $41.8M as hep C results loom
Vertex dumps one hep C dud, races ahead with second all-oral hope
Achillion Pharma attracts buyout buzz as hep C rivals fall
Achillion burnishes buyout prospects, snags fast track for hep C drug