Gilead Sciences Inc will buy biotechnology company Pharmasset Inc for about $11 billion. The world’s largest maker of HIV drugs will pay $317 per share for each Pharmasset share, an 89% premium for a company with no significant marketed products.

The Pharmasset shares have already more than tripled in the past year based on the potential of its experimental hepatitis C medicines to create a new standard of care for the 180 million people worldwide infected with the serious liver disease.

Merck & Co and Vertex Pharmaceuticals Inc won the approval this year for hepatitis C medicines that stand to significantly cut rates.

Pharmasset has three hepatitis C medicines in clinical trials. It leads candidate, PSI-7977 was recently advanced into two Phase III studies. Gilead expects PSI-7977 to be submitted for US approval in thesecond half of 2013.

John Martin, Gilead Chief Executive said that Pharmasset’s experimental drugs, combined with Gilead’s own hepatitis C portfolio, would allow the company to test regimens that are oral and interferon free.

Gilead also said PSI-7977 will be more valuable in its hands because it has the infrastructure to bring the product to more people faster than Pharmasset.

The deal will hurt its earnings through 2014 but boost them after that. It expects to close the acquisition in the first quarter of 2012.

Gilead will temporarily suspend its share program to focus on paying down debt. It also said it would finance the deal with cash on hand, bank debt and senior unsecured notes and has financing commitments from Bank of America Merril Lynch and Barclays Capital.

Barclays Capital and Bank of America advised Gilead on the deal, while Morgan Stanley advised Pharmasset. Skadden, Arps, Slate, Meagher & Flom LLP is Gilead’s legal counsel while Sullivan & Cromwell LLP is serving as legal counsel to Pharmasset.

Gilead Sciences is a biopharmaceutical company that discovers, develops and commercializes therapeutics.