Idenix Pharmaceuticals Inc (NASDAQ:IDIX) shares are up more than 235% in premarket trading this morning after Merck & Co., Inc. (NYSE:MRK) made an all-cash offer for the company. The offer is worth approximately $3.85 billion.
Merck to buy Indenix Pharmaceuticals
In a press release posted on Idenix Pharmaceuticals Inc (NASDAQ:IDIX)’s website, the two companies disclosed their definitive agreement for the acquisition. Merck & Co., Inc. (NYSE:MRK) will pay $24.50 per share of Idenix in cash. That’s 3.4 times Indenix’s closing price of around $7 per share. The boards of both pharmaceutical companies have already approved the deal.
Under the terms of the agreement between the two companies, one of Merck & Co., Inc. (NYSE:MRK)’s subsidiaries will begin a tender offer to buy all of Idenix Pharmaceuticals Inc (NASDAQ:IDIX)’s outstanding shares. The agreement is subject to a number of conditions. First, Merck’s share tender most represent at least a total of Idenix’s total outstanding shares, assuming all options are exercised. The deal is also subject to “the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions.”
Both companies expect the acquisition to close sometime in the third quarter of this year.
Idenix focuses on hepatitis C treatments
Idenix Pharmaceuticals Inc (NASDAQ:IDIX) has been focusing on treatments for hepatitis C, an area Merck & Co., Inc. (NYSE:MRK) has also been studying. The company has been developing “next-generation oral antiviral therapeutics to treat hepatitis C infection,” according to this morning’s press release. Currently Idenix has developed three potential candidates for treatment.
“Idenix’s investigational hepatitis C candidates complement our promising therapies in development and will help advance our work to develop a highly effective, once-daily, all oral, ribavirin-free, pan-genotypic regimen that has a duration of treatment as short as possible for millions of patients in need around the world,” said Dr. Roger Perlmutter, president of Merck Research Laboratories, in a statement.
Idenix Pharmaceuticals Inc (NASDAQ:IDIX) management explained how the deal creates value for shareholders.
“This agreement creates shareholder value by positioning Idenix’s strong portfolio of candidates for future success with a leading healthcare company with the experience and commitment to develop fixed-dosed combinations with the potential to impact the global burden of hepatitis C,” Ron Renaud, Idenix’s President and CEO of Idenix Pharmaceuticals Inc (NASDAQ:IDIX), said in a statement.
Baupost gains on massive Idenix stake
Seth Klarman’s firm Baupost Group is the drug maker’s largest shareholder by far, holding 35% of its shares. The firm disclosed that massive stake in February. In addition to this morning’s massive gains, Baupost also gained tremendously when Idenix Pharmaceuticals Inc (NASDAQ:IDIX) disclosed clinical data success in April. Baupost added to its holdings in Index during the first quarter of the year, raising its stake in the drug maker by more than 44%.