Hughes Hubbard, S&C Advise on $3.85 Billion Pharma Deal

Moving to expand its product offerings aimed at treating hepatitis C, pharmaceutical giant Merck & Co. announced Monday that it has agreed to buy Cambridge, Ma.-based Idenix Pharmaceuticals, Inc., for $3.85 billion.

The terms of the deal, which has been approved by both companies’ boards of directors, calls for Whitehouse Station, N.J.-based Merck to acquire all outstanding shares of Idenix through a tender offer of $24.50 per share in cash. The offer values Idenix stock at triple the $7.23 per share price at which it closed trading on Friday.

After the tender offer is completed, a second-step merger will be used to acquire the remaining shares of at least half of Idenix’s shares. The transaction is expected to close in the third quarter of 2014.

Both companies are currently involved in developing antiviral drugs designed to treat hepatitis C. Idenix has three such drugs in various stages of clinical development, while two of Merck’s candidates have already received breakthrough therapy designation from the Food and Drug Administration.

The market for hepatitis C medication has expanded in recent years. As many as 170 million people worldwide have been infected with the disease, according to the 2014 Yellow Book issued by the federal Centers for Disease Control and Prevention. Hepatitis C is especially common among the baby boom generation, which accounts for 81 percent of the 2.7 million Americans infected with the disease, according to CDC researchers.

“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,” Roger Perlmutter, president of Merck Research Laboratories, said in a statement.

Known for its research and development of drugs to treat viral diseases, Idenix previously developed antivirals for combating hepatitis B and HIV/AIDS before focusing its expertise on the treatment of hepatitis C. Ron Renaud, the company’s CEO, said in a statement that the deal would create shareholder value by giving Idenix’s current drug candidates their best chance to succeed.

Merck is being advised on the Idenix acquisition by a Hughes Hubbard and Reed team led by corporate partner James Modlin, who is based in New York. Other Hughes Hubbard attorneys in New York are corporate partner David Schwartz, tax partners Alexander Anderson and Andrew Braiterman, employee benefits and executive compensation partner Sarah Downie, antitrust partner Ethan Litwin, and associates Erin DeCecchis, Justin Greenbaum, Christine Lamsvelt and Juli Thorstenn. Attorneys working on the deal from Paris are corporate partner Alain Vincent, corporate counsel Cyrille Gaucher, labor and employment partner Nadine Voisin, and intellectual property partner Stefan Naumann. Antitrust partner William Kolasky is working on the deal from Washington, D.C.

For its part, Idenix has turned to Sullivan & Cromwell as its outside counsel. The firm’s all-New York team includes corporate partners Francis Aquila and Krishna Veeraraghavan, tax partner Ronald Creamer Jr., executive compensation and benefits partner Matthew Friestedt, intellectual property partner Nader Mousavi and intellectual property special counsel Spencer Simon. S&C associates Jeffrey Arbeit, Jeannette Braun, Mark Campbell, Julia Kim, Brenden Park and Jennifer Yoon are also working on the matter.