(CN) - Shareholders of Inhibitex are being shoved out of the company just as they "were looking forward to reaping the benefits" of the successful development of its hepatitis C anti-viral drug.
     According to a class action filed in the Delaware Chancery Court, Inhibitex and its largest shareholders violated their fiduciary duty by accepting a $2.5 billion dollar acquisition by Bristol-Meyers Squibb without looking at other offers.
     In January, Inhibitex announced that it had agreed to be acquired by the pharmaceutical giant, two months after it announced promising results from phase one clinical trials of its anti-viral INX-189.
     The drug stops the hepatitis C virus from replicating. According to the company's website, 4 million Americans and 170 million people world-wide are infected with the virus.
     When the deal was announced, Bristol-Meyers head Lamberto Andereotti said "There is significant unmet medical need in hepatitis C. This acquisition represents an important investment in the long-term growth of the company."
     Lead plaintiff John Hegarty alleges that the merger agreement "is the product of a flawed process" designed to give Inhibitex away on terms preferential to Bristol-Meyers and big shareholders.
     The deal includes a $76 million termination fee and a non-solicitation clause that prevents Inhibitex from seeking other offers. In addition, a "top-up" option requires Inhibitex to issue shares to a Bristol-Meyers holding company that would effectively give it 50 percent plus one control of Inhibitex even if a majority of shareholders reject the offer.
     "Even worse," the suit says "is that the Proposed Transaction has been pushed through and locked up the Company's largest shareholders." These shareholders control 17 percent of the company and have already signed a binding agreement to tender their shares to Bristol-Meyers.
     "This is at odds with the interests of the rest of Inhibitex's shareholders who would be best served if the Company was adequately shopped to potential bidders," the complaint states.
     The suit seeks to enjoin the transaction "unless and until the Company adopts and implements a procedure or process to obtain the highest possible price for shareholders."
     The plaintiffs are represented by Seth D. Rigrodsky, Brian D. Long and Gina M. Serra of Rigrodsky & Long in Wilmington.