Pharmasset Inc. (fka VRUS)

[oc631]

VRUS files $150,000,000 mixed shelf offering 8/30/2010.



http://files.shareholder.com/downloads/VRUS/1001246220x0xS1193125-10-200593/1301081/1193125-10-200593.pdf




Right now VRUS has $140,000,000 cash on hand so the good news is we know this isn't a funding issue. The stock is well off its 52 week high so it's obvious they aren't trying to take advantage of an over inflated price to sell stock. It's the third time VRUS has looked to raise money in the last 6 months.


Bull case: They are carrying the mixed shelf to defend against a hostile takeover. Perhaps initial discussions have already begun with an acquirer and they are further protecting shareholder (as well as their own) interests. Will we see a deal by the end of the year?


Bear case: Roche intends to drop the INFORM studies due to tox problems with ITMN-191 ,which is partnered with VRUS' RG7128 in a STAT-C combo. Is this VRUS' chance to raise more money before bad news hits?

Neutral case: VRUS is planning to take PSI-7977 into phase 3 testing unpartnered. Perhaps in combination with PSI-938 or PSI-661. Maybe CFO Kurt Leutzinger foresees fewer opportunities for VRUS to raise money going forward in this sick economy as he does today?


The reasoning (or lack of) behind this offering should draw some speculation. Carrying the mixed shelf can be looked at as added leverage in partnering talks for their second generation nukes. My feeling is this is a net positive for VRUS.