2012 started with quite a bang with this weekend’s announcement that Bristol-Myers Squibb has agreed to acquire Inhibitex for a hefty $2.5 billion.
We recently speculated on Inhibitex being an acquisition target in our article:
Unusually, the transaction was announced during the weekend whilst markets were closed, presumably to allow traders to absorb the announcement before responding when the markets reopened Monday.
Bristol-Myers Squibb will acquire Inhibitex for $26.00 per share in cash pursuant to a cash tender offer and second step merger.
The transaction, with an aggregate purchase price of approximately $2.5 billion, has been approved by the boards of directors of both companies.
“The acquisition of Inhibitex builds on Bristol-Myers Squibb’s long history of discovering, developing and delivering innovative new medicines in virology and enriches our portfolio of investigational medicines for hepatitis C,” said Lamberto Andreotti, chief executive officer, Bristol-Myers Squibb. “There is significant unmet medical need in hepatitis C. This acquisition represents an important investment in the long-term growth of the company.”
“This transaction puts INX-189 and the Company’s other infectious disease assets in the hands of an organization that can more optimally develop them and which believes as strongly as we do in INX-189’s potential in the treatment of chronic HCV,” said Russell Plumb, President and Chief Executive Officer of Inhibitex. “Bristol-Myers Squibb’s expertise in antiviral drug development, and its existing complementary portfolio, will assure that the potential of INX-189 is realized as part of future oral combination therapies for millions of patients in need around the world.”
“Bristol-Myers Squibb continues to drive advances in the field of hepatitis C research and development through internal development and selective partnerships,” said Elliott Sigal, M.D., Ph.D., executive vice president, chief scientific officer and president, R&D, Bristol-Myers Squibb. “The addition of Inhibitex’s nucleotide polymerase inhibitor to our own promising portfolio, which includes other direct-acting antivirals, brings additional options to develop all-oral regimens with better cure rates, shorter duration of therapy and lower toxicity than the current standard of care.”
Bristol-Myers Squibb will commence a cash tender offer to purchase all of the outstanding shares of Inhibitex’s common stock for $26.00 per share. The closing of the tender offer is subject to customary terms and conditions, including the tender of a number of shares that constitutes at least a majority of Inhibitex’s outstanding shares of common stock (on a fully diluted basis) and expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The agreement also provides for the parties to effect, subject to customary conditions, a merger to be completed following the completion of the tender offer which would result in all shares not tendered in the tender offer being converted into the right to receive $26.00 per share in cash. The merger agreement contains a provision under which Inhibitex has agreed not to solicit any competing offers for the company. Bristol-Myers Squibb will finance the acquisition from its existing cash resources.
This deal represents the latest in a series of deals in BMS‘s ‘string of pearls’ strategy for ensuring the company has a secure pipeline.
Early analyst response has been mixed: on the one hand the deal looks expensive, but on the other hand there aren’t many assets as promising as those owned by Inhibitex. The company has quadrupled in value in the past year alone.
Other companies developing promising new hep C drugs include Idenix Pharmaceuticals and Achillion, both coming under closer scrutiny as possible acquisition targets, and both recently upping interest with recent positive updates on their development activities.
Read the deal news story
Read our recent article: Who’s next in the hepatitis C acquisition trail?
View the 2012 M&A Scorecard
Purchase the Partnering Bristol-Myers Squibb report
View the full deal at Current Agreements (subscription required)