UPDATE: Piper Jaffray Downgrades Pharmasset to Neutral, PT Raised to $137

Piper Jaffray has published a research report on Pharmasset (NASDAQ:

) and has downgraded the company from Overweight to Neutral after the announcement that Gilead Sciences (NASDAQ:

) offered to purchase the company for $137/share, or ~$11 billion. In the report, Piper Jaffray writes, "Gilead offered $137 per share or ~$11 billion to buy Pharmasset for its HCV nucleotide analogs PSI-7977 and PSI-938. Pharmasset also developed HCV nucleoside analog Mericitatbine, which is partnered with Roche. Pharmasset intends to begin pivotal Genotype 2/3 studies of PSI-7977 next year and is exploring the combination with PSI-938 and other external compounds. Pharmasset ended FY:11 with $166.5 million in cash and no real debt. To reflect Gilead's take-out bid, we are increasing our price target to $137, however are downgrading to Neutral based on today's VRUS share price move." Piper Jaffray has also raised the price target from $90 to $137 on Pharmasset, which is currently trading up $61.57 from Friday's $72.72 closing price.