GlaxoSmithKline's ($GSK) dermatology unit--Stiefel Labs--has snagged a new eczema drug from Basilea in a $302 million deal. The pharma giant paid about $225 million in cash and pledged the remaining amount as a juicy milestone for a U.S. approval of Toctino (alitretinoin), which is in Phase III for cases of severe chronic hand eczema which no longer responds to steroids. The treatment has been approved in 29 countries and brought in about $34 million in revenue last year.
Provided it wins FDA approval, Basilea will also get a double-digit royalty on U.S. sales, three years after the approval comes through. "This acquisition gives us an immediate opportunity to develop and expand the availability of this new and innovative product of value and reinforces Stiefel and GSK's commitment to dermatology," says Simon Jose, the president of Stiefel.
The deal marks the latest in a string of such pacts for GSK, which is quite comfortable buying bolt-on companies and products for under three billion dollars. Stiefel, which GSK acquired in 2009, also has some cash available for dermatology deals. Just a couple of weeks ago Research Triangle Park, NC-based Stiefel executed a $34 million deal with Welichem Biotech for a mid-stage anti-inflammatory compound called WBI-1001. GSK, meanwhile, has been stymied in its attempt to buy Human Genome Sciences ($HGSI) for $2.6 billion.
Shares of Basilea surged 10% on news of the deal. Jefferies analysts noted that the biotech is likely to spend much of its windfall on the experimental antibiotic ceftobiprole, according to a report in Reuters. And the same analysts estimated peak potential sales at $250 million, making the treatment a relatively small but steady earner in GSK's portfolio.
- read the press release
- here's the Reuters story