Stiefel to buy Barrier Therapeutics

Chain Drug Review, July 14, 2008

CORAL GABLES, Fla. -- Stiefel Laboratories Inc. has agreed to acquire Barrier Therapeutics Inc. for $148 million.

The deal, expected to close by the end of the third quarter, underscores Stiefel's drive to search for and develop premium, innovative dermatology products and focus on providing a superior customer experience in global therapeutic and aesthetic dermatology, says a company spokesman.

"We are very impressed with Barrier Therapeutics' innovative products and pipeline," states Stiefel chairman and chief executive officer Charles Stiefel. "This strategic move will further expand our oral and topical product portfolio in development and increase our sales of novel treatments for skin conditions."

Barrier markets three pharmaceutical products: Xolegel (ketoconazole, USP) gel, 2%, for seborrheic dermatitis; Vusion (0.25% miconazole nitrate, 15% zinc oxide, 81.35% white petrolatum) ointment, for diaper dermatitis complicated by documented candidiasis; and Solage (mequinol 2%, tretinoin 0.01%) topical solution, for solar lentigines.

The company has other candidates in various stages of development for a range of dermatological conditions, including onychomycosis, psoriasis, acne, skin allergies and acute fungal infections. Barrier has its headquarters in Princeton, N.J., and has a wholly owned subsidiary in Geel, Belgium.

"We are very proud of the accomplishments of the entire Barrier Therapeutics team since we were founded in 2002, and we are pleased that Stiefel Laboratories recognizes the value that we have created," says Barrier CEO Al Altomari. "We believe that this transaction provides substantial value to our stockholders. We also believe that Barrier Therapeutics' product portfolio and innovative R&D pipeline candidates are among the greatest assets in dermatology and will strengthen Stiefel Laboratories' position in the global dermatology market."

Founded in 1847, Stiefel (a privately held company) is the world's largest independent pharmaceutical company specializing in dermatology, according to a spokesman.

The company manufactures and markets a variety of prescription and nonprescription dermatological products. Its wholly owned global network comprises more than 30 subsidiaries, manufacturing plants in six countries, research and development facilities on four continents, and products marketed in more than 100 countries around the world. It supplements its R&D efforts by seeking strategic partnerships and acquisitions worldwide.

Some of the newest and best-known Stiefel brands are Duac topical gel (clindamycin, 1% benzoyl peroxide, 5%) available in the Duac Care System; Evoclin (clindamycin phosphate) foam, 1%; Luxiq (betamethasone valerate) foam, 0.12%; MimyX cream; Olux (clobetasol propionate) foam, 0.05%, and Ohix-E (clobetasol propionate) foam, 0.05%, also available in the Olux/Olux-E complete pack; Soriatane (acitretin) capsules, available in the Soriatane CK convenience kit; Verdeso (desonide) foam, 0.05%; Brevoxyl-4 creamy wash (benzoyl peroxide 4%) and Brevoxyl-8 creamy wash (benzoyl peroxide 8%), packaged in the Brevoxyl acne wash kit; Extina (ketoconazole) foam, 2%; Oilatum cleansing bar; Physiogel cream; Stieprox (ciclopirox olamine) shampoo; Revaleskin skin care products; and Sarna lotion.

The deal will be a two-step transaction: a tender offer followed by a merger of Barrier into a wholly owned subsidiary of Stiefel, at a price of $4.15 per share of Barrier's common stock. The deal is subject to the valid tender of a majority of Barrier's fully diluted common stock, regulatory approvals and other customary conditions, but is not subject to any financing conditions. The price of $4.15 per share represents a premium of approximately 73% to Barrier's average closing price over the 30 days before June 23.

The board of Barrier has approved the agreement and has resolved to recommend that Barrier's stockholders sell their shares to Stiefel.