Deutsche Bank Sees Achillion, Arrowhead As Potential Takeover Targets

Achillion Pharmaceuticals ACHN and Arrowhead Research ARWR were up sharply Tuesday after an analyst said the pair of drug development companies could become takeover targets.

"If you want to compete with Gilead, you have to buy Achillion," Deutsche Bank's Robyn Karnauskas said on CNBC. "We think that's one take-out target."

Karnauskas noted Achillion's pipeline has promising treatments for hepatitis.

A similar appraisal of Achillion came Monday from UBS's Andrew Peters, who highlighted "a scarcity of de-risked assets."

Speculation about the acquisition of development-stage drug companies has been rife after InterMune ITMN agreed to an $8.3 billion buyout by Roche on Sunday.

Kanauskas appearing on CNBC's "Fast Money" program Monday evening, also said Arrowhead Research "may be attractive" if it releases positive data for its hepatitis drug later this autumn,

Achillion traded recently at $11.65, up eight percent; Arrowhead traded at $15.13, up 12.6 percent.