NEW YORK (AP) — Looking to angle in an a market that is growing fast, Bristol-Myers will spend $2.5 billion to acquire hepatitis C drug developer Inhibitex Inc., which saw its share price double in one day recently on early stage data of a treatment it is developing.
About 3.2 million people in the U.S. have Hepatitis C, a blood-borne disease linked to 12,000 deaths a year. The current two-drug treatment for the virus cures only about 40 percent of people. The disease, the primary cause of liver transplants in the U.S., is expected to affect an increasingly large percentage of the population as baby boomers age.
There is so much potential, Bristol-Myers Squibb Co. said late Saturday it would pay $26 per share, a 163 percent premium to the stock's last trading price of $9.87 on Friday, to get access to the company's hepatitis Ctreatment, INX-189.
"There is significant unmet medical need in hepatitis C," said CEO Lamberto Andreotti. "This acquisition represents an important investment in the long-term growth of the company."
For Inhibitex, based in Alpharetta, Ga., the acquisition provides a launching pad for its drug.
In the last full year of reported operations, the company posted losses of more than $20 million as it continued to develop INX-189.
"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 Inhibitex CEO Russell Plumb.
Bristol-Myers, based in New York, already has its own treatment for hepatitis C under development. Company researchers told the Wall Street Journal that Bristol-Myers may be able to combine its own drugs under development with that of Inhibitex to create more effective regimen.