##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
   Form 10-Q
   (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES AND EXCHANGE ACT OF 1934For the quarterly period ended
    June 30, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File
    No. 0-50772
  INHIBITEX, INC.
 (Exact name of registrant as
    specified in its charter)
   Delaware(State or other
    jurisdiction of
    incorporation or organization)

74-2708737(I.R.S. Employer
    Identification No.)9005 Westside Parkway
    Alpharetta, Georgia(Address of principal
    executive offices)

30004(Zip Code)   (678) 746-1100
 (Registrants telephone
    number, including area code)
  Not Applicable
 (Former name, former address and
    former fiscal year,
 if changed since last
    report)
  þ o
  Rule 12b-2
  o þ o
  Rule 12b-2 o þ




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##### 



TABLE OF
    CONTENTS
  
  PagePART
    I  FINANCIAL INFORMATIONItem 1.


Financial StatementsConsolidated
    Balance Sheets as of June 30, 2007 and December 31,
    2006


3Consolidated
    Statements of Operations for the Three and Six Months Ended
    June 30, 2007 and 2006 and for the Period from Inception
    (May 13, 1994) through June 30, 2007


4Consolidated
    Statements of Cash Flows for the Six Months Ended June 30,
    2007 and 2006 and for the Period from Inception (May 13,
    1994) through June 30, 2007


5Notes to Consolidated
    Financial Statements


6Item
    2.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


13Item
    3.


Quantitative and
    Qualitative Disclosures About Market Risk


21Item
    4.


Controls and
    Procedures


21PART
    II  OTHER INFORMATIONItem
    1.


Legal
    Proceedings


21Item
    1A.


Risk
    Factors


22Item
    6.


Exhibits


26Signatures


27Exhibit
    Index


28EX-31.1 SECTION 302 CERTIFICATION OF THE CEO AND CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEO AND CFO   2




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##### Table of Contents



PART I
    FINANCIAL INFORMATION  INHIBITEX,
    INC.
    (A DEVELOPMENT STAGE COMPANY)CONSOLIDATED BALANCE SHEETS
  June 30,


December 31,2007


2006(Unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
14,142,932


$
19,681,861Short-term investments


42,469,914



41,676,223Prepaid expenses and other current
    assets


656,197



1,002,810Note receivable


750,000



Accounts receivable


2,086,472



332,669Total current assets


60,105,515



62,693,563Property and equipment, net


2,997,217



3,530,796Other assets


797,522



Total assets

$
63,900,254


$
66,224,359LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
515,451


$
629,249Accrued expenses


5,889,392



7,392,210Current portion of notes payable


312,500



833,333Current portion of capital lease
    obligations


775,604



816,184Current portion of deferred revenue


1,441,668



191,667Other current liabilities


152,728



152,728Total current liabilities


9,087,343



10,015,371Long-term liabilities:Notes payable, net of current
    portion


781,250



625,000Capital lease obligations, net of
    current portion


388,112



829,871Deferred revenue, net of current
    portion


462,500



537,500Other liabilities, net of current
    portion


1,062,186



1,139,599Total long-term liabilities


2,694,048



3,131,970Total liabilities


11,781,391



13,147,341Stockholders equity:Preferred stock, $.001 par
    value; 5,000,000 shares authorized at June 30, 2007
    and December 31, 2006; none issued and outstanding






Common stock, $.001 par
    value; 75,000,000 shares authorized at June 30, 2007
    and December 31, 2006; 30,901,566 and
    30,278,135 shares issued and outstanding at June 30,
    2007 and December 31, 2006, respectively


30,902



30,278Warrants


7,377,678



11,517,743Additional paid-in capital


219,247,991



214,204,588Deficit accumulated during the
    development stage


(174,537,708
)


(172,675,591
)Total stockholders equity


52,118,863



53,077,018Total liabilities and
    stockholders equity

$
63,900,254


$
66,224,359    3




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##### Table of Contents



INHIBITEX,
    INC.
    (A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
  Period fromInception(May 13,1994)Three Months Ended


Six Months Ended


throughJune 30,


June 30,


June 302007


2006


2007


2006


2007Revenue:License fees and milestones

$
412,500


$
37,500


$
825,000


$
75,000


$
2,137,500Collaborative research and
    development


250,000



125,000



500,000



250,000



3,999,455Grants and other revenue


22,500



22,065



28,500



187,452



810,551Total revenue


685,000



184,565



1,353,500



512,452



6,947,506Operating expense:Research and development


1,678,463



6,048,198



3,245,037



13,474,750



136,457,712General and administrative


1,961,906



2,607,913



3,268,064



5,374,366



40,091,782Total operating expense


3,640,369



8,656,111



6,513,101



18,849,116



176,549,494Loss from operations


(2,955,369
)


(8,471,546
)


(5,159,601
)


(18,336,664
)


(169,601,988
)Other (loss) income, net


(1,013
)


(717
)


1,944,579



57,743



3,662,237Interest income, net


632,066



799,562



1,352,905



1,624,445



7,784,106Net loss


(2,324,316
)


(7,672,701
)


(1,862,117
)


(16,654,476
)


(158,155,645
)Dividends and accretion to
    redemption value of redeemable preferred stock


















(16,382,063
)Net loss attributable to common
    stockholders

$
(2,324,316
)

$
(7,672,701
)

$
(1,862,117
)

$
(16,654,476
)

$
(174,537,708
)Basic and diluted net loss per
    share

$
(0.08
)

$
(0.25
)

$
(0.06
)

$
(0.55
)Weighted average shares used to
    compute basic and diluted net loss per share


30,812,510



30,255,312



30,659,861



30,244,288    4




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INHIBITEX,
    INC.
    (A DEVELOPMENT STAGE COMPANY)CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
  Period fromInception(May 13,1994)Six Months Ended


throughJune 30,


June 30,2007


2006


2007Cash flows from operating
    activities:Net loss

$
(1,862,117
)

$
(16,654,476
)

$
(158,155,645
)Adjustments to reconcile net loss
    to net cash used in operating activities:Depreciation and amortization


532,041



1,016,056



10,311,224Share-based compensation


887,110



914,051



4,682,792Loss on sale of equipment


1,538



1,017



102,546Amortization of investment premium
    or discount


(735,542
)


109,815



(396,439
)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


346,613



171,489



(656,197
)Accounts receivable


(1,753,803
)


(125,786
)


(2,086,472
)Accounts payable and other
    liabilities


(191,211
)


(762,947
)


1,730,365Accrued expenses


(1,502,818
)


(2,152,288
)


5,889,392Deferred revenue


1,175,001



(200,000
)


1,904,168Net cash used in operating
    activities


(3,103,188
)


(17,741,529
)


(136,301,168
)Cash flows from investing
    activities:Purchases of property and equipment






(232,863
)


(8,963,041
)Purchases of short-term investments


(40,258,149
)


(11,630,208
)


(254,762,073
)Proceeds from maturities of
    short-term investments


40,200,000



32,067,000



212,688,598Increase in deferred merger assets


(797,522
)






(797,522
)Advance on note receivable


(750,000
)






(750,000
)Net cash provided by (used in)
    investing activities


(1,605,671
)


20,203,929



(52,584,038
)Cash flows from financing
    activities:Proceeds from promissory notes,
    notes payable and related warrants










5,513,492Payments on promissory notes and
    capital leases


(846,922
)


(1,266,863
)


(7,703,972
)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


16,852



70,967



121,209,750Net cash (used in) provided by
    financing activities


(830,070
)


(1,195,896
)


203,028,138(Decrease) increase in cash and
    cash equivalents


(5,538,929
)


1,266,504



14,142,932Cash and cash equivalents at
    beginning of period


19,681,861



33,842,937



Cash and cash equivalents at end of
    period

$
14,142,932


$
35,109,441


$
14,142,932Supplemental cash flow information:Interest paid

$
83,520


$
119,138


$
1,366,032Supplemental 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




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INHIBITEX,
    INC.
    (A Development Stage Company)NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS
  1.
    Operations    ® Staphylococcus aureus (S. aureus)
      and/or
  2.
    Summary
    of Significant Accounting Policies  Form 10-K
 6




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INHIBITEX,
    INC.
    (A Development Stage Company)
    NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Principles of Consolidation. Note 3-Agreement
  Income Taxes. Note 12-Income
  Recent Accounting Pronouncements.
    3.
    Agreement
    and Plan of Merger and Reorganization  Form 8-K Form S-4
 7




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INHIBITEX,
    INC.
    (A Development Stage Company)
    NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Goodwill and
    Other Intangible Assets
  4.
    Note
    Receivable  Form 8-K
  5.
    Other
    Assets  Note 3-Agreement
  6.
    Notes
    Payable        Year Ending December 31,2007

$
156,2502008


312,5002009


312,5002010


312,500Total future payments

$
1,093,750  8




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INHIBITEX,
    INC.
    (A Development Stage Company)
    NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    Stockholders
    Equity  Common Stock Warrants.
  8.
    Net Loss
    Per Share      Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006Net loss available for common
    stockholders

$
(2,324,316
)

$
(7,672,701
)

$
(1,862,117
)

$
(16,654,476
)Weighted average common shares
    outstanding used to compute basic earnings per share


30,812,510



30,255,312



30,659,861



30,244,288Dilutive effect of:Stock options and restricted stock














Warrants














Shares used to compute diluted
    earnings per share


30,812,510



30,255,312



30,659,861



30,244,288Basic net loss per share

$
(0.08
)

$
(0.25
)

$
(0.06
)

$
(0.55
)Diluted loss per share

$
(0.08
)

$
(0.25
)

$
(0.06
)

$
(0.55
)Number of antidilutive stock
    options and restricted stock excluded from computation


2,716,166



3,195,200



2,716,166



3,195,200Number of antidilutive warrants
    excluded from computation


2,608,035



3,807,706



2,608,035



3,807,706   9.
    License
    Fees and Collaborative Research and Support   9




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INHIBITEX,
    INC.
    (A Development Stage Company)
    NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  agreed-upon
  10.
    Share-Based
    Award Plans    Stock
    Options
    Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006Weighted average risk-free
    interest rate






4.89
%


4.83
%


4.81
%Dividend yield














Expected weighted average
    volatility






.70



.76



.70Expected weighted average life of
    options (years)






4.0



4.0



4.0Weighted average fair value of
    options granted





$
1.36


$
0.91


$
2.28    10




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##### Table of Contents



INHIBITEX,
    INC.
    (A Development Stage Company)
    NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted-Average


AggregateWeighted Average


Remaining


IntrinsicNumber of


Exercise Price


Contractual


ValueStock Options


per Option


Term


($000)Balance at December 31, 2006


2,081,054


$
5.35Granted


78,000



1.62Exercised


(11,977
)


0.48Forfeited or expired


(495,480
)


7.84Balance at June 30, 2007


1,651,597


$
4.46



3.09


$
110     Restricted
    Stock
    Weighted-AverageGrant DateRestricted Stock

Shares


Fair ValueBalance at December 31, 2006


1,659,157


$
1.87Granted


35,377



1.59Released


(626,615
)


1.93Forfeited


(3,350
)


2.05Balance at June 30, 2007


1,064,569


$
1.82     11.
    Other
    Income    12.
    Income
    Taxes     11




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##### Table of Contents



INHIBITEX,
    INC.
    (A Development Stage Company)
    NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    13.
    Severance
    and Termination Benefits    14.
    Contingency   12




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##### 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;
    the expected 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;
    our plans if the FermaVir acquisition is not consummated;
    our intent to further leverage, develop or monetize our
    MSCRAMM®
    platform including Aurexis through licenses, co-development,
    collaborations or other transactions;
    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 develop our programs or to be
    acquired FermaVir programs and generate product-related revenue
    in the future;
    and anticipated future and increased losses from operations and
    the potential volatility of our quarterly and annual operating
    costs.  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: our expectation
    to close the FermaVir acquisition in September 2007; the
    continued successful development of FermaVirs product
    candidates; 3M Company or Wyeth terminating our license and
    collaborative research agreements; maintaining sufficient
    resources, including executive management and key employees; our
    ability to successfully develop current and future product
    candidates either independently or in collaboration with partner
    and through the regulatory process; 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; intention and ability to in-license or acquire
    additional antiviral development programs in the future to
    expand our emerging antiviral pipeline; 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
 13




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##### Table of Contents



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 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
   14




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15




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Critical
    Accounting Policies
      
    Revenue Recognition
    Share-based Compensation      Results
    of Operations
  Three
    Months Ended June 30, 2007 and 2006
  Revenue.
  Research and Development Expense.
   16




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##### Table of Contents



June 30,2007


2006(In millions)Clinical and manufacturing-related
    expenses

$



$
2.8Salaries, benefits and share-based
    compensation expenses


0.8



2.0License fees, patent-related legal
    fees and other expenses


0.4



0.6Depreciation and facility related
    expenses


0.5



0.6Total research and development
    expense

$
1.7


$
6.0   General and Administrative Expense.
      June 30,2007


2006(In millions)Professional and legal fees and
    market research expenses

$
0.4


$
0.6Salaries, benefits and share-based
    compensation expense


1.1



1.3Other expenses


0.4



0.5Depreciation and facility-related
    expenses


0.1



0.2Total general and administrative
    expense

$
2.0


$
2.6   Six
    Months Ended June 30, 2007 and 2006
  Revenue.
  Research and Development Expense.
 17




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##### Table of Contents



June 30,2007


2006(In millions)Clinical and manufacturing-related
    expenses

$



$
6.5Salaries, benefits and share-based
    compensation expense


1.6



3.9License fees, patent-related legal
    fees and other expenses


0.6



1.8Depreciation and facility related
    expenses


1.0



1.3Total research and development
    expense

$
3.2


$
13.5   General and Administrative Expense.
      June 30,2007


2006(In millions)Professional and legal fees and
    market research expenses

$
0.5


$
1.8Salaries, benefits and share-based
    compensation expense


1.8



2.2Other expenses


0.7



1.0Depreciation and facility-related
    expenses


0.3



0.4Total general and administrative
    expense

$
3.3


$
5.4  18




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Other Income (Loss), net.
  Liquidity
    and Capital Resources
  Sources
    of Liquidity
          Cash
    Flows
         19




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##### Table of Contents



Funding
    Requirements
    
    whether we complete the acquisition of FermaVir as planned;
    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, alliances
    and other arrangements that we may establish;
    the scope, rate of progress and cost of our pre-clinical
    activities including the acquisition of the FermaVir programs
    and advancing our existing and to be acquired FermaVir programs
    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 preclinical
    or 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.     20




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ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    ITEM 4.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
    Changes
    in Internal Control over Financial Reporting
   PART II
    OTHER INFORMATION  ITEM 1.
    LEGAL
    PROCEEDINGS   21




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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 and the Companys
    Quarterly Report on
    Form 10-Q
    for the period ended March 31, 2007 have not materially
    changed except as set forth below.
  If we
    close the merger transaction with FermaVir or otherwise succeed
    in implementing our strategy of pursuing other preclinical and
    clinical antiviral development opportunities or programs through
    in-licensing,
    acquisition or merger, we may encounter difficulties managing
    our operations.
    Our
    business and stock price may be adversely affected if the
    acquisition of FermaVir is not completed.
    
    the diversion of our managements attention from its
    day-to-day business as a result of efforts relating to seeking
    to identify, negotiate and consummate another transaction the
    acquisition;
    the current market price of our common stock reflects a market
    assumption that the acquisition will be completed;
    under certain circumstances, we could be required to pay
    FermaVir a $900,000 termination fee;
    we must pay costs related to the merger; and
    we would not realize the benefits we expect from acquiring
    FermaVir.  If we
    are unable to retain or, in the future, attract key employees,
    advisors or consultants, we may be unable to successfully
    develop and commercialize our product candidates or otherwise
    manage our business effectively.
   22




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If we
    are successful in obtaining preclinical or clinical-stage
    antiviral development opportunities or programs through
    in-licensing, acquisition or merger activities, we may need
    additional capital, which may not be available to us on
    acceptable terms, if at all.
    
    our ability to obtain and successfully integrate preclinical or
    clinical-stage antiviral development programs we may obtain
    through in-licensing, acquisition or merger activities;
    the successful and continued preclinical and clinical
    development of our MSCRAMM product candidates independently or
    through collaborations;
    the time it takes to receive regulatory approvals needed to
    clinically advance or market our product candidates;
    the stage of development of the program we may obtain;
    future payments, if any, received or made under existing or
    possible future collaborative arrangements;
    the costs associated with protecting and expanding our patent
    and other intellectual property rights; and
    the extent to which we acquire licenses to new products,
    development programs or compounds in the future.    If we
    are successful in pursuing other preclinical and clinical
    antiviral development opportunities through in-licensing,
    acquisition or merger, your ownership in us could be
    diluted.
    We may
    be unable to enter into future license, collaborations or other
    transactions with respect to Aurexis or our MSCRAMM protein
    platform, which could harm our business.
   23




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We may
    be unable to successfully develop or commercialize product
    candidates that are the subject of collaborations if our
    collaborators do not perform.
    Our
    revenues, expenses and results of operations will be subject to
    significant fluctuations, which will make it difficult to
    compare our operating results from period to
    period.
    We
    have experienced losses since our inception. We expect to
    continue to incur such losses for the foreseeable future and we
    may never become profitable.
    
    costs related to our research programs and the clinical
    development of our product candidates; and
    general and administrative costs relating to our operations.   24




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Risks
    Related to Owning Our Common Stock
  Our
    common stock price has been highly volatile, and your investment
    in us could suffer a decline in value.
    
    our ability to complete the FermaVir merger and other
    in-licensing or acquisition transactions to obtain other
    preclinical 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;
    developments regarding our MSCRAMM program and Aurexis;
    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;
    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 us, the value of our common
    stock or our industry in general;
    termination or delay in any of our existing or future
    collaborative 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 have shares of our common stock
    traded 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.   25




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ITEM 6.
    EXHIBITS    ExhibitNo.

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  26




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SIGNATURES    INHIBITEX, INC
  
       27




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##### Table of Contents



EXHIBIT INDEX  ExhibitNo.

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  28