Merck & Co in deal to acquire Idenix for $3.85 billion

US pharma giant Merck & Co (NYSE: MRK) said today that it has entered a definitive agreement to acquire biotech firm Idenix Pharmaceuticals (Nasdaq: IDIX) for $24.50 per share in cash, 3.4 times Idenix’s closing price of $7.23 a share on Friday. Idenix shares soared almost 240% in premarket trading Monday.

The transaction, which aims to expand Merck’s position in the fast-growing and highly competitive hepatitis C therapy sector, values the purchase of Idenix at around $3.85 billion, has been approved by the boards of directors of both companies. The companies expect the transaction, which is subject to usual conditions, to close in the third quarter of this year.

Two of Idenix’ leading shareholders are Boston-based money manager Seth Klarman, whose Baupost Group owns 35%, and Swiss pharma major Novartis (NOVEN: VX) with a 22% stake. Idenix has an agreement to pay Novartis a royalty based on worldwide product sales of Idenix' future HCV drugs, unless they are used in combination with drugs from Novartis (The Pharma Letter August 1, 2012).