What happened

After Achillion Pharmaceuticals (NASDAQ:ACHN) priced its shares that Johnson & Johnson (NYSE:JNJ) is selling at $2.75 each, the company is rallying back 19.5% as of 3:15 p.m. EST.

So what

Johnson & Johnson walked away from a licensing deal with Achillion Pharmaceuticals and its hepatitis C drug pipeline earlier this year, leading to speculation that J&J would unload the $225 million worth of Achillion Pharmaceuticals stock it acquired in 2015.

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Yesterday, the two companies announced that J&J would sell its entire 18.4 million stake in Achillion Pharmaceuticals, and today, Achillion Pharmaceuticals announced that those shares will be sold for $2.75 apiece, with all proceeds going straight to J&J's coffers.

Now what

Hepatitis C research was all the rage a few years ago, when newly launched drugs offering functional cures were raking in billions of dollars each. However, an increasingly smaller patient pool and intense price competition have made the hep C market less appealing, and as a result, Achillion Pharmaceuticals' once-promising hepatitis C pipeline ended up on J&J's chopping block.

J&J's selling off Achillion Pharmaceuticals' stock officially cuts ties between the two companies, removing an overhang. It also shifts attention back toward Achillion Pharmaceuticals' most promising drug, ACH-4471. This drug is in mid-stage clinical trials for paroxysmal nocturnal hemoglobinuria (PNH), a rare disease in which the immune system attacks and destroys red blood cells. It's also being evaluated in complement component 3 glomerulopathy (C3G), another rare disease. Management expects to report interim phase 2 data from the C3G study before the end of 2017.

Overall, the market for PNH drugs is big enough to justify Achillion Pharmaceuticals' $414 million market cap. The leading drug in the indication, Soliris, is a blockbuster. But the company's going to need to put up more data before we can figure out how much of the market ACH-4471 could eventually win. The company has over $350 million in cash, so there are no worries over a cash crunch anytime soon. But I can't help but think there are clinical-stage biotech stocks with drugs closer to the finish line that might be better to buy.