Bristol-Myers Squibb Co. agreed to buy Inhibitex Inc. for about $2.5 billion to expand its development of antiviral drugs and treatments for infectious disease.
Both boards approved the transaction, the companies said in a statement today. Inhibitex agreed to recommend that its shareholders accept an offer of $26 per share, more than double its closing price of $9.87 on Jan. 6.
Inhibitex has a primary focus on development of drugs for the treatment of bacterial and fungal infections. Bristol Chief Executive Officer Lamberto Andreotti said the acquisition of the Alpharetta, Georgia-based biopharmaceutical firm will enhance his company’s portfolio of hepatitis C medicines.
“There is significant unmet medical need in hepatitis C,” Andreotti said. “This acquisition represents an important investment in the long-term growth of the company.”
Bristol shares rose 33 percent in 2011 and closed 0.2 percent higher at $34.22 in New York on Jan. 6. The transaction is expected to dilute earnings for Bristol-Myers through 2016, with an impact of about 4 cents per share in 2012 and 5 cents per share in 2013, according to the statement.
Inhibitex, traded on the Nasdaq exchange, more than tripled in value last year, boosting the company’s market capitalization to $857 million as of Dec. 31.
Bristol-Myers faces a tough task in replacing Jeremy Levin, who drove the New York-based drugmaker’s acquisition strategy since 2007, analysts and industry officials said.
Levin, considered the industry’s “number one person in business development” according to Mark Schoenebaum, an analyst at International Strategy & Investment Group in New York, left Bristol on Jan. 1 to become chief executive officer of Teva Pharmaceutical Industries Ltd.
Ron Cohen, CEO of Acorda Theraputics Inc., said that Levin has spent years as an investor, biotech company CEO and then at Bristol developing close, personal relationships across the industry that will be hard for anybody to replicate.
Bristol made 17 acquisitions over four years with Levin, seeking to diversify its drug portfolio before facing revenue erosion as the company’s top-selling drugs, led by the blood thinner Plavix, lose U.S. patent protection. Levin’s deals included the 2009 purchase of Medarex Inc., which gained the company the Yervoy skin cancer drug.
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