Pharma BD Deal Intelligence
GSK's $3.6B bet to build the "world-leading" dermatology franchise unwound piece by piece: nine products offloaded to Renaissance/Prestium in 2013, foam-based assets sold to Mayne Pharma for just $50.1 million in 2016, and by 2019 GSK was exiting prescription dermatology entirely.
GSK's $3.6B dermatology bet was progressively dismantled: sold off in pieces over the next decade for a fraction of the price, and by 2019 GSK was trying to exit prescription dermatology altogether.
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CEO Andrew Witty: 'This transaction will create a new world-leading, specialist dermatology business' — $2.9B cash + $0.4B debt + $0.3B contingent;…
Pharmaceutical Executive noted GSK was buying into a fragmented Rx dermatology market (top 20 = <58% share, $11.7B in 2007, 10% YoY growth), positioning the…
S&P highlighted analyst skepticism — Credit Suisse's Luisa Hector warned dermatology 'tends to be old molecules with limited innovation in formulations' — even…
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In April 2009, GlaxoSmithKline agreed to acquire Stiefel Laboratories, the world's largest independent dermatology company, in a transaction valued at up to $3.6 billion -- comprising $2.9 billion in cash, roughly $0.4 billion of assumed net debt, and up to $0.3 billion in contingent payments. The deal closed on July 22, 2009, creating a new world-leading specialist dermatology business that GSK expected to generate up to $240 million in annual pre-tax cost savings by 2012.
GSK's $3.6B dermatology bet was progressively dismantled: sold off in pieces over the next decade for a fraction of the price, and by 2019 GSK was trying to exit prescription dermatology altogether.
Assessment window: 15yr post-close.
$11.7B Global prescription dermatology market 2007
Prescription dermatology spans acne, psoriasis, atopic dermatitis (eczema), rosacea, fungal/bacterial skin infections, and skin oncology. The category is highly fragmented — top 20 firms held under 58% share in 2007 — with most products being established small molecules in topical formulations rather than novel biologics.
In 2009 the $11.7B global prescription dermatology market was led on the systemic-biologic side by Amgen/Wyeth's Enbrel, J&J's Remicade and Stelara (psoriasis) and on the topical/specialty side by Galderma (Nestlé/L'Oréal JV, the prior #1 independent), LEO Pharma, Valeant/Medicis, Allergan and Stiefel itself. Stiefel — the world's largest independent dermatology company at acquisition — brought 30 subsidiaries, six manufacturing facilities, ~3,500 employees and brands including Duac (acne), Olux E (dermatitis foam), Soriatane (psoriasis), PanOxyl, Oilatum and Physiogel. Combining with GSK's Bactroban (mupirocin), Cutivate (fluticasone topical) and Altabax produced a ~$1.5B revenue, ~8% global share dermatology specialty business. Deal terms: $2.9B cash + $0.4B assumed debt + up to $0.3B contingent (~$3.6B total). Sentiment was mixed — Japan Advisory framed it as healthy diversification away from primary care, while Credit Suisse's Luisa Hector cautioned that dermatology 'tends to be old molecules with limited innovation'. GSK projected $240M annual cost synergies by 2012 and 1-2% EPS accretion by 2010. Closed Q3 2009.
| Deal | Year | Value | Outcome |
|---|---|---|---|
| GlaxoSmithKline plc / Stiefel Laboratories (this deal) | 2009 | $3.6B | 29 |
| GlaxoSmithKline plc / Theravance, Inc. | 2012 | $213M | 82 |
| GlaxoSmithKline plc / Tesaro Inc. | 2018 | $5.1B | 79 |
| GlaxoSmithKline plc / Pfizer Inc. (Consumer Healthcare Division) | 2018 | $12.7B | 76 |
| GlaxoSmithKline plc / Novartis Consumer Healthcare JV | 2018 | $13.0B | 74 |
| GlaxoSmithKline plc / ID Biomedical Corporation | 2005 | $1.4B | 64 |
| GlaxoSmithKline plc / Vir Biotechnology Inc. | 2020 | $595M | 51 |
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