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Bristol-Myers Signs Agreement to Acquire Inhibitex for 160% Premium

|Includes:Bristol-Myers Squibb Company (BMY), INHX

Bristol-Myers Squibb (NYSE: BMY) announced on Saturday that it had signed a definitive agreement to acquire Inhibitex (NASDAQ: INHX) for $26.00 per share, a hefty 163% premium over the $9.87 closing price on Friday. INHX will be BMY’s 6th acquisition since Oct-07 and at $2.5 billion is estimated to be the largest of the group.

Prior to the INHX deal, BMY had completed 5 acquisitions (2 of which involved earn-outs) since Oct-07 for $4.15 billion, $1.07 billion of which was allocated to goodwill. The largest was Medarex in Sep-09 for $2.33 billion. Over the same period, the company recorded a total of $2.02 billion in restructuring and productivity transformation charges.

The acquisition of INHX, a clinical-stage biotech firm focusing primarily on treatments for hepatitis C, comes at a time when BMY’s revenue outlook is particularly uncertain. U.S. patents protecting Plavix, which accounted for 34% of 9M11 net sales, are set to expire on 17-May-12, while its share of Abilify sales, which accounted for a further 13%, are contractually scheduled to decline in 2012 and 2013.

INHX’s lead product candidate, INX-189, is currently in Phase II development. BMY reported in its press release that the drug had “exhibited potent antiviral activity, a high barrier to resistance, and pan-genotypic coverage.” The transaction in expected to be dilutive to earnings through 2016, including $0.04 and $0.05 impacts in 2012 and 2013, respectively.

Here is the press release on the Inhibitex acquisition.

Stocks: BMY, INHX