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Glaxo to Acquire Stiefel for $2.9 Billion
GlaxoSmithKline, the British drug company, will acquire Stiefel Laboratories, a closely held American maker of dermatology products, for $2.9 billion in cash, the companies said on Monday. Under the terms of the agreement, GlaxoSmithKline will also assume $400 million of debt, and may pay out as much as $300 million more if certain performance targets are met. It will combine its existing prescription dermatological products with Stiefel’s, and the new specialist global business will operate under the Stiefel identity within the GSK Group. The companies said the global business would have combined revenue of about $1.5 billion and would have a “robust new product pipeline.” “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,” Andrew Witty, the GlaxoSmithKline chief executive, said in a statement. The deal marks the latest round of consolidation among drug makers, which have sought to acquire product lines in the face of pressure from rivals making generic products. So far this year, Pfizer has agreed to buy Wyeth for $68 billion; Merck has agreed to acquire Schering-Plough for $41 billion; and Roche has struck a $46.8 billion deal for the 44 percent of Genentech it did not already own. Analysts have predicted that other major drug makers would have to pursue such deals to refresh their pipelines. The Stiefel deal will also allow the Blackstone Group, the leveraged buyout firm, to cash out. It bought a $500 million minority stake in privately held Stiefel in August 2007. Founded in Germany in 1847, Stiefel is now based in Coral Gables, Fla. But it is still run by the founding family, with Charles W. Stiefel serving as the chairman and chief executive. Its products treat acne, dandruff, psoriasis and other conditions. The new business will have a broad portfolio of dermatology products including Stiefel’s Duac, for acne, Olux E for dermatitis and Soriatane for the treatment of severe psoriasis. GlaxoSmithKline’s dermatology brands include: Bactroban, Cutivate and Altabax. The acquisition also brings Stiefel’s valuable relationships with dermatologists. Stiefel itself has acquired rivals as a growth strategy, having picked up Connetics for $605 million in 2006 and Barrier Therapeutics for about $150 million last year. Separately, GlaxoSmithKline, which is based in Britain, agreed Friday to spin off its H.I.V.-focused business and merge it with its counterpart at Pfizer into a new stand-alone company. |
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