Bristol-Myers plans $2.5bn drugs merger

GLOBAL biopharmaceutical company Bristol-Myers Squibb has announced plans to buy drug-testing firm Inhibitex for around $2.5bn (£1.62bn), gaining a frontrunner in the race to treat hepatitis C (HCV).

Inhibitex, a clinical-stage drugs company which focuses on serious infections, has urged its shareholders to support this Bristol-Myers offer of $26-per-share – a 62 per cent increase on Inhibitex’s share price of $9.87 at close of play on Friday.

The transaction is expected to be dilutive to earnings for Bristol-Myers until 2016, with earnings per share down by an expected $0.04 this year and $0.05 in 2012.

However, Inhibitex’s hepatitis C drug INX-189 is expected to be crucial in the advancement of treating the disease. Currently in Phase II development, it has exibited “potent antiviral activity, a high barrier to resistance and pan-genotypic coverage,” according to a statement.

Lamberto Andreotti, chief executive of Bristol-Myers, said, “There is significant unmet medical need in hepatitis C. This acquisition represents an important investment in the long-term growth of the company.

“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.”

Inhibitex chief executive Russell Plumb added, “This transaction puts INX-189 and the company’s other infectious disease assets in the hands of an organisation 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.”

Bristol-Myers’ largest-selling products include blood clot preventative Plavix, antidepressant Abilify and HIV combatant Reyataz.

Alongside hepatitis C treatment INX-189, Bristol-Myers will gain other drugs from Inhibitex’s development portfolio, including FV-100, which reduces shingles-associated pain, and Aurexis, which targets bloodstream infections.

Citi is leading Bristol-Myers through the acquisition while Credit Suisse Securities (USA) is advising Inhibitex.