##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from           to
 Commission File No. 0-50772
 INHIBITEX, INC.
  Delaware
    
    74-2708737(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)9005 Westside ParkwayAlpharetta, Georgia
    
    30004(Address of principal executive
    
    (Zip Code)offices)
 (678) 746-1100   Not Applicable
 þ o
  o þ o
 o þ




---



##### 



TABLE OF CONTENTS
 PAGEPART I  FINANCIAL INFORMATIONItem 1. Financial StatementsBalance Sheets as of March 31, 2007 and December 31, 2006
    
    
    3Statements of Operations for the Three Months Ended March 31, 2007 and 2006 and for the
Period from Inception (May 13, 1994) through March 31, 2007
    
    
    4Statements of Cash Flows for the Three Months Ended March 31, 2007 and 2006 and for the
Period from Inception (May 13, 1994) through March 31, 2007
    
    
    5Notes to Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4. Controls and Procedures
    
    
    17PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    18Item 1A. Risk Factors
    
    
    18Item 5. Other Information
    
    
    21Item 6. Exhibits
    
    
    22Signatures
    
    
    23Exhibit IndexEX-31.1 SECTION 302 CERTIFICATION OF THE CEO AND CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEO AND CFO
  2




---



##### Table of Contents



PART I
FINANCIAL INFORMATION
 INHIBITEX, INC.
(A DEVELOPMENT STAGE COMPANY)
 
 BALANCE SHEETS
 March 31,
    
    
    December 31,2007
    
    
    2006(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    18,502,941
    
    
    $
    19,681,861Short-term investments
    
    
    41,059,452
    
    
    
    41,676,223Prepaid expenses and other current assets
    
    
    1,088,467
    
    
    
    1,002,810Accounts receivable
    
    
    2,671,428
    
    
    
    332,669Total current assets
    
    
    63,322,288
    
    
    
    62,693,563Property and equipment, net
    
    
    3,259,909
    
    
    
    3,530,796Total assets
    
    $
    66,582,197
    
    
    $
    66,224,359LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    860,165
    
    
    $
    629,249Accrued expenses
    
    
    5,697,554
    
    
    
    7,392,210Current portion of notes payable
    
    
    312,500
    
    
    
    833,333Current portion of capital lease obligations
    
    
    795,242
    
    
    
    816,184Current portion of deferred revenue
    
    
    1,566,667
    
    
    
    191,667Other current liabilities
    
    
    152,728
    
    
    
    152,728Total current liabilities
    
    
    9,384,856
    
    
    
    10,015,371Long-term liabilities:Notes payable, net of current portion
    
    
    937,500
    
    
    
    625,000Capital lease obligations, net of current portion
    
    
    639,249
    
    
    
    829,871Deferred revenue, net of current portion
    
    
    500,000
    
    
    
    537,500Other liabilities, net of current portion
    
    
    1,100,892
    
    
    
    1,139,599Total long-term liabilities
    
    
    3,177,641
    
    
    
    3,131,970Total liabilities
    
    
    12,562,497
    
    
    
    13,147,341Stockholders equity:Preferred stock, $.001 par value; 5,000,000
shares authorized at March 31, 2007 and December
31, 2006; none issued and outstanding
    
    
    
    
    
    
    Common stock, $.001 par value; 75,000,000 shares
authorized at March 31, 2007 and December 31,
2006; 30,598,098 and 30,278,135 shares issued
and outstanding at March 31, 2007 and December
31, 2006, respectively
    
    
    30,598
    
    
    
    30,278Warrants
    
    
    7,377,678
    
    
    
    11,517,743Additional paid-in capital
    
    
    218,824,816
    
    
    
    214,204,588Deficit accumulated during the development stage
    
    
    (172,213,392
    )
    
    
    (172,675,591
    )Total stockholders equity
    
    
    54,019,700
    
    
    
    53,077,018Total liabilities and stockholders equity
    
    $
    66,582,197
    
    
    $
    66,224,359
  3




---



##### Table of Contents



INHIBITEX, INC.
(A DEVELOPMENT STAGE COMPANY)
 
 STATEMENTS OF OPERATIONS
 (unaudited)
 Period fromInception(May 13, 1994)Three Months Ended
    
    
    ThroughMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007Revenue:License fees and milestones
    
    $
    412,500
    
    
    $
    37,500
    
    
    $
    1,725,000Collaborative research and
development
    
    
    250,000
    
    
    
    125,000
    
    
    
    3,749,455Grants and other revenue
    
    
    6,000
    
    
    
    165,387
    
    
    
    788,051Total revenue
    
    
    668,500
    
    
    
    327,887
    
    
    
    6,262,506Operating expense:Research and development
    
    
    1,566,574
    
    
    
    7,426,552
    
    
    
    134,779,249General and administrative
    
    
    1,306,158
    
    
    
    2,766,453
    
    
    
    38,129,876Total operating expense
    
    
    2,872,732
    
    
    
    10,193,005
    
    
    
    172,909,125Loss from operations
    
    
    (2,204,232
    )
    
    
    (9,865,118
    )
    
    
    (166,646,619
    )Other income, net
    
    
    1,945,592
    
    
    
    58,460
    
    
    
    3,663,250Interest income, net
    
    
    720,839
    
    
    
    824,883
    
    
    
    7,152,040Net income (loss)
    
    
    462,199
    
    
    
    (8,981,775
    )
    
    
    (155,831,329
    )Dividends and accretion to
redemption value of redeemable
preferred stock
    
    
    
    
    
    
    
    
    
    
    (16,382,063
    )Net income (loss) attributable to
common stockholders
    
    $
    462,199
    
    
    $
    (8,981,775
    )
    
    $
    (172,213,392
    )Basic net income (loss) per share
    
    $
    0.02
    
    
    $
    (0.30
    )Diluted net income (loss) per share
    
    $
    0.01
    
    
    $
    (0.30
    )Weighted average shares used to
compute basic net income (loss)
per share
    
    
    30,505,516
    
    
    
    30,233,142Weighted average shares used to
compute diluted net income (loss)
per share
    
    
    31,062,147
    
    
    
    30,233,142
  4




---



##### Table of Contents



INHIBITEX, INC.
(A DEVELOPMENT STAGE COMPANY)
 
 STATEMENTS OF CASH FLOWS
 (unaudited)
 Period fromInception(May 13, 1994)Three Months Ended
    
    
    ThroughMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007Cash flows from operating activities:Net income (loss)
    
    $
    462,199
    
    
    $
    (8,981,775
    )
    
    $
    (155,831,329
    )Adjustments to reconcile net income (loss) to net cash used in
operating activities:Depreciation and amortization
    
    
    269,349
    
    
    
    488,235
    
    
    
    10,048,532Share-based compensation
    
    
    477,394
    
    
    
    333,477
    
    
    
    4,273,076Loss on sale of equipment
    
    
    1,538
    
    
    
    
    
    
    
    102,546Amortization of investment premium or discount
    
    
    (365,381
    )
    
    
    74,147
    
    
    
    (26,278
    )Forgiveness of receivables from stockholders
    
    
    
    
    
    
    
    
    
    
    28,695Amortization of warrants and discount on debt
    
    
    
    
    
    
    
    
    
    
    176,477Stock issued for interest
    
    
    
    
    
    
    
    
    
    
    126,886Cumulative effect of change in accounting principle
    
    
    
    
    
    
    (58,460
    )
    
    
    41,040Changes in operating assets and liabilities:Prepaid expenses and other assets
    
    
    (85,657
    )
    
    
    431,184
    
    
    
    (1,088,467
    )Accounts receivable
    
    
    (2,338,759
    )
    
    
    (238,505
    )
    
    
    (2,671,428
    )Accounts payable and other liabilities
    
    
    192,209
    
    
    
    607,244
    
    
    
    2,113,785Accrued expenses
    
    
    (1,694,656
    )
    
    
    (1,684,430
    )
    
    
    5,697,554Deferred revenue
    
    
    1,337,500
    
    
    
    (37,500
    )
    
    
    2,066,667Net cash used in operating activities
    
    
    (1,744,264
    )
    
    
    (9,066,383
    )
    
    
    (134,942,244
    )Cash flows from investing activities:Purchases of property and equipment
    
    
    
    
    
    
    (225,249
    )
    
    
    (8,963,041
    )Purchases of short-term investments
    
    
    (18,667,848
    )
    
    
    (5,693,006
    )
    
    
    (233,171,772
    )Proceeds from maturities of short-term investments
    
    
    19,650,000
    
    
    
    15,460,000
    
    
    
    192,138,598Net cash provided by (used in) investing activities
    
    
    982,152
    
    
    
    9,541,745
    
    
    
    (49,996,215
    )Cash flows from financing activities:Proceeds from promissory notes, notes payable and related warrants
    
    
    
    
    
    
    
    
    
    
    5,513,492Payments on promissory notes and capital leases
    
    
    (419,897
    )
    
    
    (640,387
    )
    
    
    (7,276,947
    )Proceeds from bridge loan and related warrants
    
    
    
    
    
    
    
    
    
    
    2,220,000Net proceeds from the issuance of preferred stock and warrants
    
    
    
    
    
    
    
    
    
    
    81,788,868Proceeds from the issuance of common stock, net of issuance costs
    
    
    3,089
    
    
    
    44,402
    
    
    
    121,195,987Net cash (used in) provided by financing activities
    
    
    (416,808
    )
    
    
    (595,985
    )
    
    
    203,441,400(Decrease) increase in cash and cash equivalents
    
    
    (1,178,920
    )
    
    
    (120,623
    )
    
    
    18,502,941Cash and cash equivalents at beginning of period
    
    
    19,681,861
    
    
    
    33,842,937
    
    
    
    Cash and cash equivalents at end of period
    
    $
    18,502,941
    
    
    $
    33,722,314
    
    
    
    18,502,941Supplemental cash flow information:Interest paid
    
    $
    38,650
    
    
    $
    65,844
    
    
    $
    1,321,162Supplemental non-cash investing and financing activities:Fixed assets capitalized using promissory notes and capital leases
    
    
    
    
    
    
    
    
    
    
    4,447,946Conversion of bridge loans and interest payable into preferred stock
    
    
    
    
    
    
    
    
    
    
    2,124,576Preferred stock dividends and accretion of preferred stock to
redemption value
    
    
    
    
    
    
    
    
    
    
    16,382,063
  5




---



##### Table of Contents



INHIBITEX, INC.
(A Development Stage Company)
 
 NOTES TO UNAUDITED FINANCIAL STATEMENTS
 1. Operations
  ® Staphylococcus aureus (S.
aureus)
     2. Summary of Significant Accounting Policies
  Income Taxes.
 6




---



##### Table of Contents



Recent Accounting Pronouncements.
  3. Net Income Per Share
   Three Months EndedMarch 31,2007
    
    
    2006Net income (loss) available for common stockholders
    
    $
    462,199
    
    
    $
    (8,981,775
    )Weighted average common shares outstanding used to
compute basic earnings per share
    
    
    30,505,516
    
    
    
    30,233,142Dilutive effect of:Stock options and restricted stock
    
    
    551,419
    
    
    
    Warrants
    
    
    5,212
    
    
    
    Shares used to compute diluted earnings per share
    
    
    31,062,147
    
    
    
    30,233,142Basic net income (loss) per share
    
    $
    0.02
    
    
    $
    (0.30
    )Diluted net income (loss) per share
    
    $
    0.01
    
    
    $
    (0.30
    )Number of antidilutive stock options and restricted
stock excluded from computation
    
    
    2,510,798
    
    
    
    2,347,528Number of antidilutive warrants excluded from
computation
    
    
    2,602,823
    
    
    
    3,800,143
 4. Share-Based Award Plans
  7




---



##### Table of Contents



Stock Options
  Three Months EndedMarch 31,2007
    
    2006Weighted average risk-free interest rate
    
    
    4.83
    %
    
    
    4.51
    %Dividend yield
    
    
    
    
    
    
    Expected weighted average volatility
    
    
    .76
    
    
    
    .70Expected weighted average life of options (years)
    
    
    4.0
    
    
    
    4.0Weighted average fair value of options granted
    
    $
    0.91
    
    
    $
    5.79
  AggregateWeighted Average
    
    
    Weighted-Average
    
    
    IntrinsicNumber of
    
    
    Exercise Price
    
    
    Remaining Contractual
    
    
    ValueStock Options
    
    
    Per Option
    
    
    Term
    
    
    ($000)Balance at
December 31,
2006
    
    
    2,081,054
    
    
    $
    5.35Granted
    
    
    78,000
    
    
    
    1.62Exercised
    
    
    (1,681
    )
    
    
    0.68Forfeited or
expired
    
    
    (470,351
    )
    
    
    8.06Balance at March
31,
2007
    
    
    1,687,022
    
    
    $
    4.42
    
    
    
    3.29
    
    
    $
    189
  Restricted Stock
  Weighted-AverageGrantDate FairRestricted Stock
    
    Shares
    
    
    ValueBalance at December 31, 2006
    
    
    1,659,157
    
    
    $
    1.87Granted
    
    
    35,377
    
    
    
    1.59Released
    
    
    (315,989
    )
    
    
    1.95Forfeited
    
    
    (3,350
    )
    
    
    2.05Balance at March 31, 2007
    
    
    1,375,195
    
    
    $
    1.84
 8




---



##### Table of Contents



5.
License Fees and Collaborative Research and Support
  6. Contingency
  7. Other Income
  8. Notes Payable
  9




---



##### Table of Contents



Year Ending December 31,2007
    
    $
    234,3752008
    
    
    312,5002009
    
    
    312,5002010
    
    
    312,5002011
    
    
    78,125Total future payments
    
    $
    1,250,000
 9. Income Taxes
   10. Stockholders Equity
 Common Stock Warrants.
 11. Subsequent Events
  10




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANICAL CONDITION AND RESULTS OF
OPERATIONS
 This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking
statements involve known and unknown risks, uncertainties and other factors that may cause actual
results, performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking statements. In some cases,
you can identify forward-looking statements by terms such as may, will, should, could,
would, expect, plan, intend, anticipate, believe, estimate, project, predict,
forecast, potential, likely or possible, as well as the negative of such expressions, and
similar expressions intended to identify forward-looking statements. These forward-looking
statements include, without limitation, statements relating to:
 
    
    our ability to receive shareholder approval and consummate the FermaVir Pharmaceuticals, Inc.
(FermaVir) acquisition;
    
    our timing and development plans associated with FermaVir s two development programs;
    
    our ability to execute our strategy;
    
    our plan to preserve a significant portion of our financial resources to acquire additional pre-clinical
or clinical-stage development opportunities beyond our MSCRAMM® platform through in-licensing,
acquisition or merger to expand our development pipeline;
    
    the number of months that our current cash, cash equivalents, and short-term investments will allow us to
operate;
    
    our future financing requirements, the factors that influence these requirements, and how we expect to
fund them;
    
    potential future revenue from collaborative research agreements, partnerships, license agreements, or
materials transfer agreements;
    
    our ability to successfully commercialize our products and generate product-related revenue in the future;
    
    and the potential volatility of our quarterly and annual operating costs; and
 These statements reflect our current views with respect to future events and are based on
assumptions and subject to risks and uncertainties including, without limitation: Expectation to
close on the FermaVir acquisition in July or August 2007; 3M Company or Wyeth terminating our
license and collaborative research agreements; maintaining sufficient resources, including key
employees; our ability to successfully develop current and future product candidates either
independently or in collaboration with partners; our collaborators do not fulfill their
obligations under our agreements with them in the future; our ability to attract suitable
organizations to collaborate on the development and commercialization of our product candidates;
the condition of the financial equity and debt markets and our ability to raise sufficient
funding in such markets; our ability to manage our current cash reserves as planned; the
expected timing of the cash proceeds from the sale of excess raw materials related to the
manufacture of Veronate; intention and ability to in-license or acquire additional antiviral
development programs in the future to expand our emerging antiviral
pipeline. If the merger with
FermaVir does not occur, we may or may not decide to pursue other antiviral development programs
through in-licensing, acquisition or merger, and may consider other strategic alternatives or
pathways in which to utilize our assets, including a merger with or being acquired by another
life science, pharmaceutical or other company, or liquidation; changes in general economic
business or competitive conditions; and other statements contained elsewhere in this Quarterly
Report on Form 10-Q and risk factors described in or referred to in greater detail in the Risk
Factors section of this Form 10-K for December 31, 2006. There may be events in the future that
we are unable to predict accurately, or over which we have no control. You should read this Form
10-Q and the documents that we reference herein and have been filed or incorporated by reference
as exhibits completely and with the understanding that our actual future results may be
materially different from what we expect. Our business, financial condition, results
of operations, and prospects may change. We may not update these forward-looking statements,
even though our situation may change in the future, unless we have obligations under the federal
securities laws to update and disclose material developments related to previously disclosed
information. We qualify all of the information presented in this Form 10-Q , and particularly our
forward-looking statements, by these cautionary statements.
 Inhibitex ® , MSCRAMM ® , Veronate ® ,
and
Aurexis ® are registered trademarks of Inhibitex, Inc. MSCRAMM is an acronym for
 11




---



##### Table of Contents



Microbial Surface Components Recognizing Adhesive Matrix Molecules. The following discussion should be read in conjunction with the financial statements and the notes
thereto included in Item 1 of this Quarterly Report on Form 10-Q .
 Overview
  
 Recent
Developments and Outlook
  Recent Developments and Outlook
 ®
   12




---



##### Table of Contents



®
   Critical Accounting Policies
   
    
    Revenue Recognition
    
    Accrued Expenses
    
    Share-based Compensation
   13




---



##### Table of Contents



Results of Operations
 Three Months Ended March 31, 2007 and 2006
 Revenue.
 Research and Development Expense. ,
  March 31,2007
    
    
    2006(In thousands)Clinical and manufacturing-related expenses
    
    $
    
    
    
    $
    3,645Salaries, benefits and share-based compensation expense
    
    
    800
    
    
    
    1,897License fees, patent-related legal fees and other
expenses
    
    
    255
    
    
    
    1,237Depreciation and facility related expenses
    
    
    512
    
    
    
    648Total research and development expense
    
    $
    1,567
    
    
    $
    7,427
 General and Administrative Expense.
  14




---



##### Table of Contents



March 31,2007
    
    
    2006(In thousands)Professional and legal fees and market research
expenses
    
    $
    38
    
    
    $
    1,076Salaries, benefits and share-based compensation expense
    
    
    751
    
    
    
    968Other expenses
    
    
    392
    
    
    
    543Depreciation and facility-related expenses
    
    
    125
    
    
    
    179Total general and administrative expense
    
    $
    1,306
    
    
    $
    2,766
 Other Income (Loss), net .
 Liquidity and Capital Resources
 Sources of Liquidity
     Cash Flows
     15




---



##### Table of Contents



Funding Requirements
  
    
    whether we complete the acquisition of FermaVir;
    
    whether we are successful in obtaining additional pre-clinical development or clinical-stage
product candidates or programs through future in-licensing, acquisition or merger activities;
    
    the terms and timing of any collaborative, licensing and other arrangements that we may establish;
    
    the scope, rate of progress, and cost of our pre-clinical activities and advancing our existing or
future research and development programs through clinical development;
    
    the cost of manufacturing clinical trial materials for our product candidates;
    
    the timing and costs involved in conducting pre-clinical tests or clinical trials;
    
    the cost to obtain and timing of regulatory approvals;
    
    the number of product candidates we may advance into clinical development;
    
    future payments received or made under existing or future license or collaboration agreements;
    
    the cost to maintain a corporate infrastructure to support a publicly-traded company;
    
    the cost of filing, prosecuting, and enforcing patent and other intellectual property claims; and
    
    the future need to acquire additional licenses or acquire product candidates or programs.
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  16




---



##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  17




---



##### Table of Contents



PART II
OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
 You should carefully consider the following discussion of risks, together with the other
information contained in this Form 10-Q . The occurrence of any of the following risks could
materially harm our business, our financial condition, and our ability to raise additional capital
in the future or ever become profitable. In that event, the market price of our common stock could
decline and you could lose part or all of your investment. The Risk Factors included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2006 have not materially
changed except as set forth below.
 Risks Relating to the Acquisition of FermaVir
 Our business and stock price may be adversely affected if the acquisition of FermaVir is not
completed.
  
    
    the diversion of managements attention from its day-to-day business as a result of
efforts relating to the acquisition;
    
    the market price of shares of our stock may decline to the extent that the current
market price reflects a market assumption that the acquisition will be completed;
    
    under certain circumstances, we could be required to pay FermaVir a termination fee;
    
    we may or may not decide to pursue other antiviral development programs through
in-licensing, acquisition or merger, and may consider other strategic alternatives or
pathways in which to utilize our assets, including a merger with or being acquired by
another life science, pharmaceutical or other company, or liquidation;
    
    we will not realize the benefits we anticipate from acquiring FermaVir.
 We may be unable to identify and obtain additional antiviral development programs or product
candidates, or otherwise implement our strategy on a timely basis, if at all, which could harm
our business and adversely impact our stock price.
  18




---



##### Table of Contents



.
 If we are unable to retain or attract key employees, management advisors or consultants, including
those with experience in antiviral drug development, we may be unable to successfully advance
antiviral programs we may obtain through the acquisition of FermaVir or through other in-licensing,
acquisition or merger activities, and our business and stock price could be adversely impacted.
  If we are successful in completing the acquisition of FermaVir and in obtaining additional
pre-clinical or clinical stage product candidates or programs through in-licensing, acquisition or
merger activities, we may need additional funds, which may not be available to us on acceptable
terms, if at all.
  
    
    whether or not we are successful in receiving stockholder approval and closing the acquisition of
FermaVir and the timing of the closing;
    
    our timing and development plans associated with FermaVirs two development programs;
    
    our ability to obtain and successfully integrate pre-clinical or clinical-stage product candidates or
programs through in-licensing, acquisition or merger activities;
    
    the successful and continued development of our MSCRAMM product candidates in preclinical and clinical
testing through collaboration;
    
    future payments, if any, received or made under existing or possible future license or collaboration
arrangements;
    
    the costs associated with protecting and expanding our patent and other intellectual property rights; and
    
    the need to acquire licenses to new products or compounds in the future.
  19




---



##### Table of Contents



If we are successful in pursuing additional preclinical and clinical development programs through
in-licensing, acquisition or merger, your ownership in us could be diluted.
  Our future revenues, expenses and results of operations will be subject to significant
fluctuations, after the closing of the acquisition of FermaVir, which will make it difficult to
compare our operating results from period to period.
  Risks Related to the Ownership of Our Common Stock
 Our common stock price has been highly volatile, and your investment in us could suffer a decline
in value.
  
    
    whether or not we are successful in receiving stockholder approval and closing the acquisition of FermaVir;
    
    our timing and development plans associated with FermaVirs two development programs;
    
    our ability to complete additional in-licensing, acquisition or merger transactions in the future to
obtain other pre-clinical or clinical-stage development programs on terms acceptable to us, our
stockholders, analysts, and institutional buyers;
    
    our ability to manage our cash burn rate at an acceptable level;
    
    disclosure of our or our competitors clinical trial status or data;
    
    the approval or commercialization of new products by us or our competitors, and the disclosure thereof;
    
    announcements of scientific innovations by us or our competitors;
    
    rumors relating to us or our competitors;
    
    public concern about the safety of our product candidates, products or similar classes of products;
    
    litigation to which we may become subject;
    
    disclosures of any favorable or unfavorable clinical or regulatory developments concerning our clinical
trials, manufacturing, or product candidates;
 20




---



##### Table of Contents




    
    actual or anticipated variations in our annual and quarterly operating results;
    
    changes in general conditions or trends in the biotechnology and pharmaceutical industries;
    
    changes in drug reimbursement rates or government policies related to reimbursement;
    
    announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures
or capital commitments;
    
    new regulatory legislation adopted in the United States or abroad;
    
    our failure to achieve or meet equity research analysts expectations or their estimates of our business,
or a change in their recommendations concerning our company, the value of our common stock or our industry
in general;
    
    termination or delay in any of our existing or future license or collaboration arrangements;
    
    future sales of equity or debt securities, including large block trades or the sale of shares held by our
directors or management;
    
    the loss of our eligibility to use Form S-3 due to the amount of our market capitalization falling below
specified levels;
    
    the loss of our eligibility to trade our shares of common stock on the Nasdaq Global Market due to our
failure to maintain listing standards;
    
    changes in accounting principles;
    
    failure to comply with the periodic reporting requirements of publicly-owned companies, under the
Securities Exchange Act of 1934, as amended, and the Sarbanes-Oxley Act of 2002; and
    
    general economic conditions.
  
 ITEM 5. OTHER INFORMATION
  21




---



##### Table of Contents



ITEM 6. EXHIBITS
  Exhibit No.
    
    Description31.1
    
    Section 302 Certification of the Chief Executive Officer and Chief Financial Officer
Required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Section 906 Certifications of the Chief Executive Officer and the Chief Financial Officer
 22




---



##### Table of Contents



SIGNATURES
  Date: May 10, 2007
    INHIBITEX, INC/s/ Russell H. PlumbRussell H. PlumbPresident, Chief Executive Officer, and
Chief Financial Officer 23




---



##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description31.1
    
    Section 302 Certification of the Chief Executive Officer and Chief Financial Officer as
Required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Section 906 Certifications of the Chief Executive Officer and the Chief Financial Officer
 24