Inhibitex acquisition is one of several recent moves in the hepatitis C market

Pharma giant Bristol-Myers Squibb (BMS) has struck a deal to buy US biotech Inhibitex for $2.5 billion (?1.6 billion). The move will stock BMS’s pipeline with antivirals, most notably INX-189, a nucleotide polymerase inhibitor which is in Phase II trials for treating hepatitis C virus (HCV) infection. 

There is currently a huge amount of interest in this market. According to 2004 World Health Organization estimates, 170 million people (about 3% of the global population) are infected with HCV, which is associated with potentially lethal liver damage. But many go undiagnosed for years because of the absence of symptoms in the early stages of infection. This suggests potential for market growth. Indeed, Inhibitex predicts that sales of drugs for treating HCV infection will rise to more than $8.8 billion by 2012. Furthermore, the gold standard treatment, a pegylated interferon in conjunction with ribavarin, can cause unpleasant side effects including depression, anaemia and flu-type symptoms. 

In May 2011, the US approved two protease inhibitors for treating HCV infection: Incivek (telaprevir) from Vertex and Johnson & Johnson; and Victrelis (boceprevir) from Merck & Co - the first new drugs in this area for 20 years. Furthermore, in November 2011, Gilead Sciences launched an $11 billion takeover of Pharmasset, which is currently testing three drug candidates for treating HCV infection. The lead candidate, PSI-7977, is in Phase III trials. 

BMS already has a position in this area: the company has four candidates in Phase II trials, including protease inhibitors. But it needs new drugs if it is going to sustain sales as key patents expire over the next few years.  

Whether Inhibitex represents a good bet remains to be seen. It is a company that has come back from decidedly uncertain times. 

Established in 1994, it became a public company based in Alpharetta, Georgia, in 2004. But in 2006, its lead candidate, Veronate, an antibody for preventing bacterial infections in infants, returned disappointing Phase III results causing the company share price to plummet. In the aftermath, the company cut its workforce from 80 fulltime employees, including 63 researchers, to just one and shifted the focus of its business to buying other companies or acquiring rights to their pipeline products through licensing deals. 

In 2007, the company bought FermaVir, a small biotech set up by Erik de Clercq and Jan Balzarini at KU Leuven, Belgium, and Chris McGuigan at Cardiff University, UK. Through the move, Inhibitex gained FX-100, an antiviral for treating shingles that is now in Phase II trials. Then in 2008, Cardiff researchers led by McGuigan synthesised INX-189. 

In 2011, the stock market rediscovered its interest in the company following good results for INX-189 that led to a rapid growth in share price. 

’There is significant unmet medical need in hepatitis C, said BMS chief executive Lamberto Andreotti. ’This acquisition represents an important investment in the long-term growth of the company.’ 

Andrew Turley