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Glaxo to Pay at Least $226 Million for Basilea’s Toctino

GlaxoSmithKline Plc agreed to buy the marketing rights for Basilea Pharmaceutica AG’s hand eczema drug Toctino for 146 million pounds ($226 million). Basilea shares rose to the highest in almost six weeks.

Glaxo’s Stiefel unit will pay as much as 50 million pounds more if the drug reaches certain goals, and “double-digit” royalties on U.S. sales three years after the product’s approval there, Basilea said in a statement late yesterday.

The deal gives Stiefel, the skin business that Glaxo bought in 2009 for $2.9 billion, a drug that’s marketed in 14 countries and had sales of 22 million pounds last year, Glaxo said in a separate statement. Basilea, based in Basel, Switzerland, will use the cash to advance development of its experimental antibiotics, antifungals and cancer drugs.

“On the surface, the deal with Stiefel appears impressive,” Philippa Gardner, an analyst with Jefferies International Ltd. in London, wrote in a note today. “However, in return Basilea is handing over all Toctino rights with only limited future income post-U.S. launch.” Gardner is the top-ranked Basilea analyst in the past year, according to data compiled by Bloomberg, and has a hold recommendation on the stock.

Stock Jumps

Basilea jumped 4 percent to 46 Swiss francs in Zurich, the highest price since May 3, valuing the company at 441 million francs ($458 million). More than 288,100 shares were traded, the most since February 2010. Glaxo gained 0.8 percent to 1,451.5 pence in London.

Basilea, which won compensation from Johnson & Johnson over trials of its ceftobiprole antibiotic, plans to apply for regulatory approval of the product as a treatment for pneumonia in Europe this year, Basilea Chief Executive Officer Anthony Man said in the statement.

Stiefel will assume responsibility for manufacturing and sales of Toctino, the companies said. About 90 Basilea employees who are involved in marketing the drug will have the option of joining Stiefel at the conclusion of the deal, Man said on a call with reporters today.

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