GlaxoSmithKline plc (NYSE:GSK) is acquiring the world's largest independent dermatology company, Stiefel Laboratories Inc., for
up to $3.6 billion.
So far most reports have focused on Glaxo CEO Andrew Witty's strategy, which includes
staying away from megamergers, expanding in emerging markets and shifting money from pharmaceuticals into vaccines and consumer businesses as blockbuster drugs face generic competition.
We can probably expect more dealmaking to build up other facets of Glaxo. And it isn't a stretch to think the combined dermatology unit, which will be led by Stiefel Labs CEO Charles Stiefel, could itself get bigger. Last year, Coral Gables, Fla.'s Stiefel
acquired Barrier Therapeutics Inc. for $148 million in cash, and in 2006, it
paid about $640 million for rival California drug company Connetics Corp.
Cost synergies for the new business are expected primarily from combining manufacturing and administrative functions. The companies expect to deliver annual pretax cost savings of up to $240 million by 2012 with integration costs of approximately $325 million over the next three years. Sales of Stiefel's products for 2008 were about $900 million, while sales for GSK's prescription dermatology products were about $550 million.
Stiefel has more than 15 projects in late-stage development.
On Glaxo, reports recently surfaced that it's
in talks to acquire a minority stake in South African generic drug maker Aspen Pharmacare Holdings Ltd. and that it
may try to buy Indian generic drug maker Piramal Healthcare Ltd. Glaxo also
teamed up with Pfizer Inc. (NYSE:PFE) to create a world No. 1 company focused on research, development and commercialization of HIV medicines. -
Baz HiralalGo to the Pipeline story (subscription required)
Join Corporate Dealmaker's LinkedIn forum
Juergen Lasowski
And the winners are...
