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John P. Gavin, CFA, is the founder and CEO of Disclosure Insight®, an independent publisher of investment research. Mr. Gavin has spent his entire career of over 25 years in the financial services industry. Prior to starting “DI” in 2000, he worked as an equity analyst and portfolio manager... More
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  • Bristol-Myers Signs Agreement to Acquire Inhibitex for 160% Premium 0 comments
    Jan 9, 2012 2:01 PM | about stocks: 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
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