You know how stocks sometimes react to news on peers… Today we are again seeing a run in the world of Hepatitis C drug candidates after news that Bristol-Myers Squibb Co. (NYSE: BMY) is reaching down to acquire Inhibitex Inc. (NASDAQ: INHX). The deal calls for a massive premium at $2.5 billion valued at $26.00 per share. In layman terms, this is a premium of about 160%. The deal was announced over the weekend and the company’s hepatitis drug candidate dubbed INX-189 is currently in Phase II studies. Bristol-Myers views this as an adjacent acquisition because it is also developing treatments for this chronic liver disease.
Achillion Pharmaceuticals, Inc. (NASDAQ: ACHN) is up 13% at $8.98. Idenix Pharmaceuticals, Inc. (NASDAQ: IDIX) is up a sharp 34% at $9.45 on strong volume today. Vertex Pharmaceuticals Inc. (NASDAQ: VRTX) is up 2% at $34.81 on the day after having been up 6%. It recently won an FDA approval and its shares have a market cap of $7.25 billion.
If you feel like drug companies are reaching down and in many cases betting the farm on unproven companies, you are not alone. The field of drug companies is highly mature. Teh top biotech outfits now trade with valuations not much higher than the old Big Pharma drug companies. Then there is a no-man’s land down to the biotech and emerging pharma players valued in the range of a few hundred million dollars to the low billions.
Inhibitex shares are up 140% at $23.74 and the prior 52-week range is $2.15 to $16.49. For all practical purposes, Inhibitex was a story for later in 2013 or even beyond that. The company is not expected to have revenues of its own during 2012.
Take This Retirement Quiz To Get Matched With A Financial Advisor (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the
advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
