Bristol-Myers Squibb has hit the acquisition trail and unveiled plans to buy hepatitis C specialist Inhibitex.

The US major is shelling out $26.00 per share and the second-step merger is worth around $2.50 billion. The board of directors at Inhibitex has backed the deal, which represents a 163% premium to its closing price on January 6, and other shareholders holding 17% of its common stock have entered into agreements to support the transaction.

Inhibitex' primary focus is on the development of nucleotide/nucleoside analogues for the treatment of HCV. Its lead compound is INX-189, an oral nucleotide polymerase (NS5B) inhibitor which is in Phase II development that has exhibited potent antiviral activity, "a high barrier to resistance and pan-genotypic coverage".

It has two other drugs in Phase II: FV-100, a nucleoside inhibitor in development for the reduction of shingles-associated pain, and Aurexis, a humanised monoclonal antibody in development for the treatment of serious Staphylococcus aureus bloodstream infections. Inhibitix also has other HCV nucleotide polymerase inhibitors in preclinical development and has licensed its proprietary protein platform to Pfizer for the development of a staphylococcal vaccine, which is in a Phase I/II trial.

B-MS noted that nucleotides/nucleosides "are emerging as an important class of antivirals that may play a critical role as the backbone of future direct-acting antiviral-only combination approaches to HCV treatment". Chief executive Lamberto Andreotti said "there is significant unmet medical need in hepatitis C" and "this acquisition represents an important investment in the long-term growth of the company.”

R&D chief Elliott Sigal added that 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".

HCV market growing

HCV is a hot area at the moment and the deal comes less than seven weeks after Gilead Sciences stunned the markets by agreeing to acquire nucleotides specialist Pharmasset for $11 billion. Last year also saw approvals in the USA and Europe for Merck & Co's Victrelis (boceprevir) and Johnson & Johnson/Vertex Pharmaceuticals/Mitsubishi Tanabe Pharma Corp's Incivek/Incivo (telaprevir).

In December, B-MS linked up with J&J to investigate its investigational oral drug daclatasvir in combination with the latter's TMC435 for the treatment of chronic HCV. Separately, both drugs are in Phase III development.

The transaction is expected to be dilutive to B-MS profits through 2016, with an expected impact on earnings per share of $0.04 in 2012. Inhibitex has agreed not to solicit any competing offers and B-MS will finance the acquisition from its existing cash resources.