UPDATE: JP Morgan Downgrades Rating to Neutral, Raises PT to $137 on Pharmasset

A report from J.P. Morgan downgrades its rating from Overweight to Neutral and raises its price target from $100 to $137 on Pharmasset VRUS. The report states, “Yesterday, Gilead announced a definitive agreement to acquire Pharmasset for $137/share (or ~$11B). We think the key risks outlined in the merger agreement (namely a severe adverse event or SAE) and the risk of an unsolicited competitive offer from another bidder are both low probability and unlikely (especially given the high premium paid (~90%))… With the initial expiration date of the tender offer of Jan 11, 2012 and minimal clinical data until then, we think there is a high probability of the deal closing in early 2012.” VRUS closed yesterday at $134.14.