Cubist acquires Illumigen in potential $341.5 million deal

SEATTLE and LEXINGTON, Mass. Cubist Pharmaceuticals may pay up to $341.5 million to buy Illumigen Biosciences, adding an experimental treatment for hepatitis C, a blood-borne virus that can damage the liver, to its pipeline.

Lexington, Massachusetts-based Cubist, the maker of the skin-infection drug Cubicin, will pay $9 million to acquire Seattle-based Illumigen, plus a potential $332.50 million in regulatory and drug development payments, the companies said today in a statement.

The purchase of Illumigen will add an experimental HCV treatment, called IB657, to Cubist’s portfolio of infection-fighting medicines. The HCV market, the companies said in a statement, was $2.2 billion in 2005 and is expected to reach $4.4 billion in 2010.

Cubist will make payments during the development of IB657 for hepatitis of up to $75.5 million and an additional $117 million if Cubist develops Illumigen products for other viruses, the companies said. The company will pay up to $140 million in milestone payments once products reach the market.