New acquisition for Bristol-Meyers

Posted by Theresa Milano On Sunday, January 8th 2012 in Finance

Bristol-Myers Squibb Co. (BMY) has finally agreed to pay $2.5 billion in cash in order to buy Inhibitex Inc. (INHX). The company they seek to get hold of is the second maker of hepatitis C drugs. The acquisition is due to take place in two months. Inhibitex announced it will ask its shareholders to accept the offer made Bristol – Mayer of $26 per share. This agreement is one of the biggest made by the company since 2007. Gilead Sciences Inc. (GILD) managed to get a similar drug to the one Bristol will acquire when it bought Pharmasset Inc. (VRUS) on November 21^st 2011.

“This drug is the best chance anyone has of competing with Gilead/Pharmasset,” Brian Skorney, an analyst with Brean Murray Carret & Co. in New York, explained in an e-mail he sent today. “That explains the premium.”

Inhibitex’s INX-189 is already in its second stage of testing. Approximately 170 million people have the hepatitis C virus all over the world. Current drugs that are given by injection cause side effects that make therapy a very difficult process. This new generation of drugs, administrated as pills might make the process smoother.

“The world is moving toward an all-oral regimen for hepatitis C, and Bristol-Myers, which is strong in antivirals, seems like it wants to be a part of that,” Les Funtleyder, a health-care strategist and portfolio manager with Miller Tabak & Co. in New York explained earlier today. “The deal seems a bit expensive for an early-stage compound, but there is scarcity value,” said Funtleyder.