Gilead Sciences, Inc. and Pharmasset, Inc. have signed a definitive agreement under which Gilead will acquire Pharmasset in a transaction valued at $11 billion. Gilead plans to finance the transaction with cash, bank debt and senior unsecured notes. The transaction is expected to close in 1Q12.

Pharmasset has three clinical-stage product candidates for the treatment of chronic hepatitis C virus (HCV) advancing in trials in various populations. The company’s lead product candidate, PSI-7977, has recently been advanced into two Phase III studies, with a third Phase III study to be initiated in 1H12. PSI-938, a guanosine nucleotide analog, is being tested in a Phase IIb interferon-free trial as monotherapy and in combination with PSI-7977 in subjects with HCV of all viral genotypes. Mericitabine (RG7128), a cytidine nucleoside analog, is partnered with Roche and is being evaluated in three Phase IIb trials. Roche is responsible for the development of mericitabine. These compounds add to Gilead’s existing HCV portfolio, as well as its efforts to develop an all-oral regimen for the treatment of HCV.

“The acquisition of Pharmasset represents an important and exciting opportunity to accelerate Gilead’s effort to change the treatment paradigm for HCV-infected patients by developing all-oral regimens for the treatment of the disease regardless of viral genotype,” said John C. Martin, Ph.D., chairman and chief executive officer of Gilead. “This transaction will serve to drive the long-term growth of our business, and we look forward to working closely with the Pharmasset team to advance a broad clinical program in HCV to address the unmet needs of patients and the medical community.”

“We are excited to join together with Gilead, which shares our commitment to providing HCV patients with new, highly efficacious and safe oral therapies,” said Schaefer Price, president and chief executive officer, Pharmasset. “Gilead’s established expertise and leadership in the field of antiviral drug development and commercialization, coupled with the company’s existing portfolio of promising compounds for HCV, make this partnership an ideal step to fully realize the potential of our promising molecules as part of future all-oral combination therapies for millions of patients in need around the world.”