Inhibitex, Inc. has entered into a definitive merger agreement with FermaVir Pharmaceuticals, Inc. FermaVir's development-stage antiviral pipeline includes FV-100, a highly potent nucleoside analogue for the treatment of herpes zoster infections (shingles) that is expected to enter Phase I clinical trials in the third quarter of 2007, and a series of preclinical compounds for the treatment of human cytomegalovirus (CMV) disease.
Under the terms of the agreement, each of the 20.8 million outstanding shares of FermaVir common stock will be exchanged for 0.55 shares of Inhibitex common stock. Immediately following the transaction, Inhibitex shareholders are expected to own approximately 73 percent of the combined company. Inhibitex will also assume up to 13.9 million of outstanding FermaVir options and warrants at the same exchange ratio. Completion of the transaction is subject to the approval of Inhibitex and FermaVir shareholders, required regulatory approvals and certain other conditions as set forth in the definitive agreement. The transaction is expected to close by the end of July 2007.
FermaVir's antiviral compounds were discovered in the laboratories of Drs. Erik de Clercq and Jan Balzarini of the Rega Institute for Medical Research, Katholieke Universiteit, Belgium, and Chris McGuigan of Cardiff University, Wales. Drs. de Clercq and Balzarini have co-invented multiple approved antivirals, including tenofovir, one of the most widely-used nucleoside reverse transcriptase inhibitors (NRTI) for the treatment of HIV AIDS.
"The acquisition of FermaVir brings us two very exciting antiviral development programs and world-class antiviral drug discovery expertise that builds on our extensive anti-infective drug development capabilities," stated Russell H. Plumb, president and chief executive officer of Inhibitex. "This transaction also represents an important step in our strategic shift to focus our resources on the development of high-value antiviral compounds. Consistent with this strategy, we are actively engaged in ongoing discussions to obtain additional development programmes that will complement our emerging antiviral pipeline."
Published in vitro studies demonstrate that FV-100, a prodrug of CF-1743, is the most potent antiviral compound developed to date for the treatment of shingles. Further, based on its exceptional ability to rapidly enter cells and quickly inhibit viral replication, FV-100 has the potential to further reduce all shingles-related symptoms, including the incidence and the severity of acute pain and post-herpetic neuralgia (PHN), a painful condition caused by damage to the nervous system. Preclinical data also suggest that FV-100 may have a favorable dosing and safety profile as compared to other currently-available antiviral therapeutics used to treat shingles.
The FermaVir CMV antiviral program includes nucleoside analogues, as well as series of non-nucleoside analogues, which appear to have a unique mechanism of action and have been shown, in vitro, to possess potent antiviral activity and a favourable cellular toxicity profile. Inhibitex anticipates that a lead clinical candidate will be nominated from this program by the end of 2007.
"Based on their encouraging profiles, we believe FV-100 and FermaVir's CMV compounds represent potential antiviral therapeutics where there is an attractive opportunity to address unmet medical needs," stated Mr. Plumb. "There are over 2.5 million cases of shingles each year and approximately 20 per cent of these patients experience debilitating long-term pain. With respect to CMV, current antiviral therapy is limited due to safety and toxicity concerns, such that many immunocompromised patients, who are highly susceptible to these infections, cannot fully benefit from existing therapies."
In connection with this transaction, Geoffrey Henson, chief executive officer of FermaVir, will join Inhibitex as vice president of drug development. Gabrielle Cerrone, director and chairman of FermaVir, and Chris McGuigan, Ph.D., also a current director of FermaVir, are expected to become members of the Inhibitex Board of Directors on closing of the transaction. In addition, Richard J. Whitley, M.D. and Erik De Clercq, MD, current directors of FermaVir, are expected to join the Inhibitex Scientific Advisory Board upon the completion of the transaction.
"We are delighted to unite forces with the Inhibitex team to advance our pipeline of promising antiviral compounds," stated Geoffrey Henson, CEO of FermaVir. "We believe that Inhibitex's anti-infective development capabilities and experience, along with its operating infrastructure and resources, can enhance and accelerate the development of FV-100 and our CMV programme."
Lazard is acting as exclusive financial advisor to Inhibitex; Dechert LLP is acting as legal counsel to Inhibitex in this transaction.