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Sunday, April 19, 2009

GlaxoSmithKline nears $3 billion deal for Stiefel, Forms Hiv Drug Deal with Pfizer

GlaxoSmithKline PLC is close to a deal to buy U.S. skincare specialist Stiefel Laboratories for about $3 billion, the Wall Street Journal said on its website on Sunday, citing unnamed sources.

The deal for Stiefel, which is partly owned by private equity firm Blackstone Group , is expected to be announced on Monday, the report said, adding there is still a chance it could fall apart.

Also announced this weekend GlaxoSmithKline PLC and Pfizer Inc. will pool their resources to create a new company to develop and sell HIV medicines, leveraging a minimal investment into a market-leading position.

The deal, announced Thursday, reflects two key trends sweeping the industry. Companies are narrowing their research areas and cutting costs to improve productivity, and once-ardent competitors are working together to share the risks and costs of developing drugs.

The two companies plan to blend London-based Glaxo's portfolio of HIV drugs now on the market -- some with patents approaching expiration -- with New York-based Pfizer's more robust pipeline of drugs in development.

With 11 HIV medicines already on sale, the new venture will have a 19 percent market share, ranking it No. 2 behind sales leader Gilead Sciences Inc. Other competitors in the field include heavyweights Bristol-Myers Squibb Co., Abbott Laboratories, Merck & Co. and DuPont Pharmaceuticals Co.

"The combination of a broad current revenue base and a new diverse pool of pipeline assets provides a significant platform to invest in developing and delivering new HIV medicines," Glaxo Chief Executive Andrew Witty said during a conference call with analysts.

The new company's name will be announced when the deal closes, now set for the fourth quarter.

Disclosure I own bmy, abt,mrk,and pfe.

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