Bristol-Myers Squibb is buying ZymoGenetics, which is quarter-owned by Novo Nordisk, giving it full ownership of a hepatitis C drug the firms are developing.

Under the terms of the deal, B-MS is acquiring ZymoGenetics for $9.75 per share in cash, leading to a purchase price of $885 million, or $735 million net of cash acquired. The price represents a premium of around 84% premium over the company’s closing share price yesterday.

The deal has been unanimously approved by the boards of directors of both companies and shareholders holding 37% of the outstanding shares of ZymoGenetics’ common stock have entered into agreements with B-MS to support the transaction. Novo, which has a stake of nearly 26%, is part of that group and chief financial officer Jesper Brandgaard said "we find the offer from B-MS attractive".

For its cash, B-MS is getting full ownership of the companies' joint experimental hepatitis C drug, pegylated-interferon lambda, which is in Phase IIb. It is also getting the rights to Recothrom a recombinant thrombin approved by the US Food and Drug Administration for use as a topical haemostat to control non-arterial bleeding during surgical procedures.

The acquisition also includes IL-21 protein, a cytokine currently in Phase II as a potential immunotherapy for metastatic melanoma, plus access to an earlier-stage pipeline of six biologics, including an anti-IL-31 antibody, currently in pre-clinical development for atopic dermatitis. B-MS is also gaining potential milestone and royalty payments from six partnered programmes in various stages of clinical development by Merck KGaA and Novo Nordisk.

B-MS chief executive Lamberto Andreotti said that "building on our leadership in virology, we are developing a strong portfolio to help patients with hepatitis C" and in addition, "ZymoGenetics brings proven capabilities with therapeutic proteins and revenue from a marketed specialty surgical biologic". He added that the acquisition "is another example of our strategic, targeted approach to business development.”

In 2010, the transaction is expected to be dilutive to earnings per share by $0.03 in 2010 and by $0.07 in 2011.