Baupost Group To Buy 16.4 Million Shares Of Idenix Pharmaceuticals

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Baupost Group, the hedge fund managed by Seth Klarman, agreed to purchase more shares of Idenix Pharmaceuticals Inc (NASDAQ:IDIX), a biopharmaceutical company engaged in the discovery and development of medicines for the treatment of human viral diseases.

Baupost raises stake to 35%

According to Idenix Pharmaceuticals Inc (NASDAQ:IDIX), Klarman’s firm and some of its affiliates signed a definitive agreement to purchase 16,420,241 shares of its common stock for $6.50 each.

Baupost Group currently owns 36,910,868 shares or 27.55% stake in Idenix Pharmaceuticals Inc (NASDAQ:IDIX). The hedge fund will beneficially own 35% of the outstanding common stock of the biopharmaceutical company following the completion of the registered direct offering on January 31, 2014. The hedge fund is the largest shareholder of the biopharmaceutical company.

According to Idenix Pharmaceuticals Inc (NASDAQ:IDIX) it will receive approximately $106.7 million net proceeds after deducting estimated expenses related to the offering. The biopharmaceutical company plans to use the proceeds of the transaction for general corporate purposes including clinical trial costs and ongoing future patent litigation expenses.

Idenix patent infringement case against Gilead

Last year, Idenix Pharmaceuticals Inc (NASDAQ:IDIX) filed patent infringement lawsuits against Gilead Sciences, Inc. (NASDAQ:GILD) involving its co-owned patents 6,914,054 and 7,608,597 that cover methods of treating the hepatitis C virus using 2′-methyl nucleosides.

In its complaint, Idenix is requesting the court to declare that Gilead’s imminent distribution, importation, use, sale or offer to sell drugs containing sofosbuvir, a 2′-methyl nucleoside compound violates its patents.

The biopharmaceutical company is confident that its current cash and cash equivalents balance plus the net proceeds from the offering will be enough to satisfy its needed liquidity until the second half of 2015.

Idenix stock price rose 17%

The stock price of Idenix Pharmaceuticals Inc (NASDAQ:IDIX) surged 17% to $8.03 per share after announcing its definitive agreement with the hedge fund. Over the past 52-weeks, the shares of the biopharmaceutical company climbed from $2.93 to $9.32 per share.

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