Glaxo buys Stiefel Laboratories for $2.9 billion

[April 20, 2009]  LONDON (AP) -- British drugmaker GlaxoSmithKline PLC said Monday it will pay $2.9 billion to buy American dermatology business Stiefel Laboratories Inc.

GlaxoSmithKline will also assume $400 million in debt and has agreed to a further payment of up to $300 million depending on performance, bringing the total cost of the deal to up to $3.6 billion.

Stiefel, a privately owned company based in Coral Gables, Florida, makes acne treatments and other skin creams, lotions, washes and vitamins. The company put itself up for sale earlier this year, and reportedly had drawn interest from Johnson & Johnson and Novartis AG as well as Glaxo.

Glaxo shares were up 0.8 percent at 1046.0 pence on the London Stock Exchange.

The company said its existing prescription dermatological products will be combined with Stiefel's and sold under the Stiefel brand.

Stiefel's leading products include Duac for acne, Olux E for dermatitis and Soriatane for severe psoriasis. Stiefel's sales in 2008 were approximately $900 million, while Glaxo's sales of dermatology products was around $550 million, the company said.

"This transaction will create a new world-leading, specialist dermatology business and re-energize our existing dermatology products," said Andrew Witty, Glaxo's CEO.

"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."

Stiefel was founded by John David Stiefel in Offenbach-on-Main, Germany in 1847 as a candle maker, but later switched to medicated soaps. The company moved to the United States in 1910, and now has factories in the United States, Mexico, Brazil, Singapore, Ireland and Pakistan.

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On the Net:

GlaxoSmithKline, http://www.gsk.com/

Stiefel Laboratories, http://www.stiefel.com/

[Associated Press; By ROBERT BARR]

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