Panacos Up on Speculation of Takeover
Monday May 8, 2:55 pm ET Panacos Pharma Shares Rise on Analyst Note Speculating on Acquisition by Gilead Sciences

NEW YORK (AP) -- Panacos Pharmaceuticals Inc. shares jumped Monday that after an analyst speculated in a research note that Gilead Sciences Inc. could potentially acquire the biotech company in 2007.

Shares of Panacos climbed 73 cents, or 13 percent, to $6.24 in afternoon trading on the New York Stock Exchange. Shares have traded between $2.64 and $12 over the past 52 weeks.

Yaron Werber, an analyst for Citigroup who covers Gilead, suggested in a research note that Gilead could leverage its HIV treatment holdings with the acquisition of Panacos for a promising new treatment called PA-457. Gilead makes the antiretrovirals Viread and Truvada, which combines the company's antiretroviral Emtriva along with Viread into a single daily tablet.

According to Werber's scenario, Gilead buys Panacos for about $620 million cash after the release of positive mid-stage clinical trial data for PA-457. With positive results, decisive late-stage clinical trials could be launched for the treatment in HIV patients who had received other treatments.

Werber estimates that an acquisition of Panacos would shave 4 cents per share and 3 cents per share off Gilead's 2007 and 2008 earnings, respectively, but add 16 cents per share in 2009 if PA-457 were launched and approved.

Separately, a filing with the Securities and Exchange Commission on Monday showed that Panacos President and Chief Executive Samuel K. Ackerman bought 10,000 shares of common stock at $5.62 per share, and Chief Financial Officer Peyton J. Marshall bought 10,000 shares at $5.61 per share. Shares of Panacos closed at $5.51 on Friday.