Sometimes the best solution for dealing with competitors is to pay them to go away.
Yesterday Vertex Pharmaceuticals
The drugmaker will get two early stage hepatitis C compounds in the deal, one of which looks like it has at least as good of activity as Vertex's phase 3 compound telaprevir, although it's still very early. The ultimate goal will likely be to combine the newly acquired compounds with telaprevir to try and increase the virus-fighting activity even further. There's certainly precedence for combination treatments to treat viral diseases -- Gilead Sciences'
I'm not sure that now was the ideal time to make an acquisition and dilute shareholders further. Small companies like American Oriental Bioengineering
But Vertex didn't have much of a choice -- it pretty much had to make the acquisition for the long-term sustainability of the company. Hepatitis C is an insanely competitive market. Vertex along with Schering-Plough
Vertex Pharmaceuticals and InterMune are Motley Fool Rule Breakers recommendations. Find out why the analysts at the Motley Fool's high-growth newsletter liked them so much by grabbing a free 30-day trial subscription, where you'll get access to all of our back issues as well as the current picks.
Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Natus Medical and American Oriental Bioengineering are Motley Fool Hidden Gems selections and the Fool owns shares of American Oriental. The Fool's disclosure policy was acquired in the first round of the draft.