Panacos Pharmaceuticals Inc has entered into a merger agreement with V I Technologies, Inc (Vitex). The merged company will have products for serious infectious diseases include Vitex's INACTINE technology, currently in Phase 3 clinical testing for the inactivation of pathogens in red blood cells, and Panacos' small-molecule antiviral drugs that includes PA-457, HIV maturation inhibitor which is currently in phase 1 clinical testing.

Samuel K. Ackerman, currently chairman of Vitex and chairman and acting CEO of Panacos, will be Chairman and CEO of the combined Company, which will use the V.I. Technologies and Vitex names. "Clinical-stage products in the combined company will initially address markets exceeding $8 billion," he said.

Under the terms of the transaction, Vitex will issue 25 million common shares in exchange for all outstanding Panacos shares upon the close of the transaction.

Earlier, Panacos Pharma had announced that it had successfully completed a single, escalating dose phase 1 clinical trial of the HIV Maturation Inhibitor, PA-457. According to company sources, following oral administration to uninfected, healthy volunteers, PA-457 was well tolerated and exhibited favorable oral bioavailability and pharmacokinetics.