Pharmaceutical giant Merck (Whitehouse Station, NJ) acquired Rosetta Inpharmatics (Kirkland, WA) on May 11 in an all-share deal valued at approximately $620 million. Rosetta, whose main source of income comes from bioinformatics collaborations, will operate as an independent subsidiary and continue to preserve the confidentiality of research deals with current customers. UBS Warburg (New York) analyst Michael Clulow feels that this acquisition validates an IT approach to drug discovery: “I think you're going to see a lot of other pharmaceutical companies stand up and say 'we need to stake an investment in IT.'” Clulow points to Bayer's (Leverkeusen, Germany) multi-million dollar collaborations with bioinformatics companies Lion (Heidelberg, Germany) and Curagen (New Haven, CT) (Nat. Biotechnol. 19, 186, 2001). “What's the obstacle of Bayer deciding to come in and take those companies over?” Rosetta, with $150 million in the bank—enough to last “indefinitely,” according to Culow—jumped 75% to $17.34 the day of the news.