Vertex, the next target for takeovers?

Today is Saturday, when I have some peace at home. So want to write something I was thinking about last week but not time to do so.
Not sure if you noticed last week about news that Bristol-Myers Squibb paid 163% premium to buy a small biotech company, Inhibitex. The price tag was $2.5B! Unbelievably, isn't? Inhibitex instantly jumped about that much, more than doubling its share price. I wish I had foreseen this and bought Inhibitex. Haha...

Why would BMS like to pay that much for a small company that has no drugs even close to the market? A Hepatitis C drug! Inhibitex's lead product is INX-189, an oral hepatitis C drug in Phase II or mid-stage development. Anyone who knows the drug development understands how much risk this deal is. The failure of phase II drugs is rather higher and regulatory hurdles to overcome are quite daunting, especially when there are already 2 successful drugs on the market for this disease. Actually this is not the only deal for Hepatitis C drug recently. In Nov 2011, Gilead Sciences made a $11 billion acquisition of Pharmasset Inc , which has its own promising hepatitis C therapies in development. The deal was an 89 percent premium.

Such kind of incredibly expensive acquisitions indicate that big pharmas are really interested in this drug market. It is estimated that the total market value for hepatitis C drugs is around $50B and it is just the beginning with only 2 novel drugs marketed thus far. One of them is made by Vertex, a better one of the two.

I talked about Vertex in Aug last year. Back then, Vertex had already dropped by 30% at around $45. I said it could decline further. Yes, it did, not immune to the overall bear market late last year. As it stands now, it is trading in $30s. I think it has plummeted over 50% since its peak after the approval of its Hep C drug. At this level, I think it is really attractive. Not only I think it will be doing well with the Hep C drug, I also think there is a good chance Vertex may be taken over by some big pharma. Think about it. It is a huge market and big pharmas have already paid a super price tag for other biotechs with Hep C drugs that are not even close to be marketed. Vertex has already got a very good drug in the market, which will likely be the standard of care for future new drugs in the regulatory approval process. In other words, any new drug will need to show that it is statistically better in efficacy with a reasonable safety profile. The hurdle is much higher for them. I already saw some reports speculated that J&J or Merck or Abbott could be the interesting takeovers for Vertex. While it is a pure speculation, I won't be surprised to see if this happens.
Here is my game plan. If the overall market indeed corrects as I'm expecting in the next few weeks, I hope Vertex will decline as well with it. If so, I will be seriously considering to add positions for it.