Bristol-Myers Squibb Company (BMS) announced Tuesday that it had signed an agreement to acquire biopharmaceutical company ZymoGenetics for $9.75 per share in cash, or approximately $885 million. Under the terms of the agreement, BMS will gain control of ZymoGenetics’ product development pipeline, which includes potential treatments for surgical bleeding, metastatic skin cancer, and atopic dermatitis. However, perhaps the biggest prize BMS will acquire in the deal is pegylated-interferon lambda, a novel interferon drug candidate for the treatment of hepatitis C, an infectious disease that affects the liver. Approximately 3.2 million people in the U.S. are chronically infected with hepatitis C, according to the U.S. Centers for Disease Control, and ZymoGenetics’ drug candidate has the potential to improve upon the current standard of care, interferon combined with ribavirin. While this drug combination works for many patients, it has to be taken for months and has many potential side effects. According to a report by market research firm Global Data, the global hepatitis C market was worth $4 billion in 2009 and is projected to grow at a compound annual growth rate of 9.8% to reach $8.5 billion by 2016. ZymoGenetics is competing with Vertex Pharmaceuticals, Merck, Anadys Pharmaceuticals, Idenix Pharmaceuticals, and a number of other companies to be the first to market a hepatitis C drug that outperforms the current standard of care. Along with ZymoGenetics, Vertex has been drawing a lot of attention; the Cambridge, Mass.-based company released positive late-stage clinical data on Tuesday. In a study of 662 treatment-resistant hepatitis C patients, 65 percent of patients who took Vertex’s telaprevir were cured, compared to 17 percent of patients who were treated with the current standard of care. The news wasn’t as good for Idenix, which halted trials of two of its experimental hepatitis C drugs over safety concerns after liver abnormalities were discovered in three healthy study participants. Other news from the hepatitis C space: PSI-7977, developed by Pharmasset, recently received fast track designation from the FDA. The drug is currently in Phase 2b clinical trials. With such a significant need for effective hepatitis C treatments, and with so many competitors in the field, the race to commercialization continues to be an interesting one.