While recent buyers of Rosetta (RSTA) stock may be dancing in the tulips over the big premium Merck (MRK) is paying to acquire the bioinformatics company, investors who bought the issue either on the August IPO or in the months following the offering are just getting their heads above the water.

MRK's takeout price of $620 million (net of RSTA's $53.3 million in cash), is $188.8 million above RSTA's post-money valuation of $431.2 million from its IPO. But the deal is $618.9 million (56%) below RSTA's peak market cap of $1.1 billion on Sept. 1, when the shares hit their 52-week high of $38.063.

Investors who bought the stock since mid-December still are in the money. After topping out in early September, the stock was swiftly halved by mid-December, and spent most of March and April below $10.

RSTA raised $115.9 million in its IPO, selling 8.3 million shares at $14. MRK, which said the acquisition will help it analyze gene data and select drug targets, is paying about $17.86 per RSTA share, using MRK's Friday close of $75.94.

Winding path

It was not lost on investors that BTG (LSE:BGC) has upside in last week's FDA approval of Millennium's Campath alemtuzumab to treat chronic lymphocytic leukemia (CLL) (see B5). The technology investment and development company, which moved up 122.5p (10%) to 1350p on the week, is eligible for royalties in both Europe and the U.S.

The patents covering the technology originally were assigned to BGC, which later licensed them to the Wellcome Foundation. GlaxoWellcome, now GlaxoSmithKline (GSK), ultimately abandoned the project and returned the rights. BGC then licensed the antibody to LeukoSite, which was acquired by MLNM a little over a year ago.

The antibody originally was developed by Cambridge Pathology, the department of pathology at Cambridge University - thus the name "Campath." BGC will pay GSK and Cambridge Pathology a percentage of the royalties.

Meanwhile, profit-takers had the final say on MLNM shares. The stock moved up $1.53 to $38.57 on 2.1 million shares on Tuesday, but then retreated to $34.38, down $3.40 on the week. Development partner Ilex (ILXO) added $0.02 on the week to $20.01.