Bernstein says that Gilead (GILD) needs $5B-$7B in additional revenue by 2020, while Vertex (VRTX) has the best profile of any candidate to provide the revenue. Bernstein says the companies have a significant amount of complementarity, and that the deal, at $45B, could be accretive to Gilead after 2017. Following the deal, Gilead's stock could rise to $130-$140 in the near term, according to Bernstein. The firm keeps an Outperform rating on Gilead and a Market Perform rating on Vertex.

Vertex Pharmaceuticals and TreeFrog Therapeutics announced that Vertex has obtained an exclusive license to TreeFrog's proprietary cell manufacturing technology, C-Stem, to optimize production of Vertex's cell therapies for type 1 diabetes, or T1D. TreeFrog and Vertex will collaborate to scale-up TreeFrog's process to produce and amplify cells for Vertex's T1D therapies. TreeFrog's proprietary technology platform, C-Stem, is designed to mimic the natural microenvironment, allowing cells to grow exponentially in 3D. The technology will enhance Vertex's ability to generate large amounts of fully differentiated cells for its portfolio of T1D cell therapies.