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GEN News Highlights : Apr 20, 2009

GlaxoSmithKline to Acquire Stiefel for $2.9B Up Front

Deal will create large dermatology company with combined revenues of approximately $1.5 billion and robust new product pipeline.

GlaxoSmithKline (GSK) reported plans to purchase Stiefel Laboratories for $2.9 billion in cash. GSK also expects to assume $0.4 billion of net debt upon closing. A potential $0.3 billion cash payment is contingent on future performance. GSK's existing prescription dermatological products will be combined with Stiefel's, and the new specialist global business will operate under the Stiefel identity within the GSK Group.

The new business will have a robust development pipeline and a broad portfolio of dermatology products. Stiefel currently has more than 15 projects in late-stage development across a variety of dermatological conditions such as acne, dermatoses, and fungal infection. The new firm’s portfolio of dermatology products will include Stiefel's brands: Duac, for acne, Olux E for dermatitis, and Soriatane for the treatment of severe psoriasis. GSK's key dermatology brands include: Bactroban, Cutivate, and recently launched Altabax.

"As part of our strategy to grow and diversify GSK's business, we are continuing to make new investments through targeted acquisitions,” reports Andrew Witty, CEO of GSK. “This transaction will create a new specialist dermatology business and re-energize our existing dermatology products. The addition of Stiefel's broad portfolio will provide immediate new revenue flows to GSK with significant opportunities to enhance growth through leveraging our existing global commercial infrastructure and manufacturing capability."

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