Barrier doubles after $148 million Stiefel buyout

MondayMorning, June 30, 2008

Barrier Doubles after $148 Million Stiefel Buyout. Barrier Therapeutics Inc. (Princeton NJ), the maker of skin-care drugs, more than doubled last week in Nasdaq trading after Stiefel Laboratories Inc. (Coral Gables FL) said it would buy the company for $148 million. Barrier, which sells three skin products, closed the week up $2.27 to $4.03. It was the biggest jump since the company first sold shares to the public in April 2004. The cash offer from closely held Stiefel amounts to $4.15 a share, more than double Barrier's $1.76 closing price prior to announcement of the buyout. Analysts said the price wasn't a surprise, given other recent acquisitions and talk of mergers in the skin-drug business. The purchase price exceeds Barrier's 30-day average closing share price by 73%, Stiefel said. "This transaction provides substantial value to our stockholders," said Al Altomari, Barrier's chief executive officer. "Barrier Therapeutics' product portfolio and innovative research and development pipeline candidates are among the greatest assets in dermatology."

Barrier hasn't made a profit since the company went public. The company's three skin drugs, Xolegel, Vusion and Solage, generated $25 million in sales last year. Vusion, which accounted for three-fourths of company revenue, is a diaper-rash ointment that also treats the yeast infection candidiasis. Xologel, the company's second-biggest seller, treats seborrheic dermatitis, a skin rash affecting 8.5 million Americans. The product got a boost in May when Barrier made a deal with Procter & Gamble Co. (Cincinnati OH) to include Head & Shoulders shampoo with Xologel prescriptions. Barrier is developing other drugs, including Hyphanox for toenail fungus and Rambazole for psoriasis and acne.