GlaxoSmithKline and Stiefel to Create New World-Leading Specialist Dermatology Business

GlaxoSmithKline and Stiefel to Create New World-Leading Specialist Dermatology
Business

Stiefel, the world's largest independent dermatology company, acquired by GSK
in deal valued at up to $3.6 billion

New global business will have combined revenues of approximately $1.5 billion
and robust new product pipeline

Significant step forward to grow and diversify GSK's business, providing
immediate new revenue and synergy opportunities

LONDON, April 20 /PRNewswire-FirstCall/ -- GlaxoSmithKline plc (NYSE: GSK) and
Stiefel Laboratories Inc. today announced that they have signed an agreement
to create a new world-leading specialist dermatology business. Under the terms
of the agreement GSK will acquire the total share capital of Stiefel for a
cash consideration of $2.9 billion. GSK also expects to assume $0.4 billion of
net debt upon closing. A potential further $0.3 billion cash payment is
contingent on future performance. GSK's existing prescription dermatological
products will be combined with Stiefel's and the new specialist global
business will operate under the Stiefel identity within the GSK Group.

Andrew Witty, Chief Executive Officer of GSK, said, "As part of our strategy
to grow and diversify GSK's business, we are continuing to make new
investments through targeted acquisitions. This transaction will create a new
world-leading, specialist dermatology business and re-energise our existing
dermatology products. The addition of Stiefel's broad portfolio will provide
immediate new revenue flows to GSK with significant opportunities to enhance
growth through leveraging our existing global commercial infrastructure and
manufacturing capability. We look forward to working with Stiefel to develop
this exciting opportunity."

Charles W. Stiefel, Chairman and Chief Executive Officer of Stiefel, said,
"The combination of Stiefel and GSK will create a leading company in global
dermatology with a strong presence in the prescription, consumer and aesthetic
skin health markets. Along with adding hundreds of marketed dermatology
products, this deal will increase the value of Stiefel's unparalleled
dermatology pipeline by expanding the customer base to which we will be able
to offer these products. It also gives GSK access to one of Stiefel's greatest
assets - its valued relationships and shared understanding with dermatologists
around the world."

New world-leading specialist dermatology business
The new business will have a broad portfolio of dermatology products including
Stiefel's leading brands: Duac, for acne, Olux E for dermatitis and Soriatane
for the treatment of severe psoriasis. GSK's key dermatology brands include:
Bactroban, Cutivate and recently launched Altabax.

Combined pro forma revenues for the calendar year ended 2008 were
approximately $1.5 billion, representing an 8% share of the global
prescription dermatology market. Sales of Stiefel's products for the calendar
year ended 2008 were approximately $900 million. Sales of GSK's prescription
dermatology products were approximately $550 million.

The new business will have a robust development pipeline, with Stiefel
currently having more than 15 projects in late-stage development across a wide
variety of dermatological conditions, such as acne, dermatoses and fungal
infection. The new business also has access to significant innovative and
proprietary formulation technologies.

Charles Stiefel will continue in the role of CEO and Chairman of the Board of
Stiefel until closure of the transaction and he will lead the new business
thereafter.

Financial details
The formation of the new business will provide significant opportunities for
both sales and cost synergies. Stiefel's products will benefit from GSK's
global distribution and commercial organisations, particularly in markets such
as Brazil, Russia, India, China and Japan. GSK's products will benefit from
Stiefel's specialty sales force, relationships and experienced management in
dermatology.

Cost synergies for the new business are expected primarily from combining
manufacturing and administrative functions. The companies expect to deliver
annual pre-tax cost savings of up to $240 million by 2012 with integration
costs of approximately $325 million over the next 3 years. These integration
costs will be reported within the middle column of GSK's income statement
together with other ongoing major restructuring costs. Excluding integration
costs, the transaction is expected to result in minor earnings per share (EPS)
dilution for GSK in 2009 (less than 1%) and to be 1-2% accretive to EPS in
2010.

The transaction has been approved by the Stiefel stockholders. Closing of the
transaction is conditional upon certain matters including receiving certain
regulatory clearances and no material adverse change occurring in respect of
Stiefel's business prior to closing. The transaction is expected to close in
the third quarter of 2009.

GlaxoSmithKline - one of the world's leading research-based pharmaceutical and
healthcare companies - is committed to improving the quality of human life by
enabling people to do more, feel better and live longer. For further
information please visit www.gsk.com

Stiefel Laboratories, Inc. is enthusiastically committed to advancing
dermatology and skin science around the world. The company's deeply-rooted
dedication and drive for innovation along with its sole focus on dermatology
has led Stiefel to become the largest independent dermatology company in the
world. In addition to more than 30 wholly-owned subsidiaries, six
manufacturing plants and a global research and development network, Stiefel's
most valuable asset is its global network of nearly 3,500 driven associates.

By combining expertise, knowledge and imagination, Stiefel delivers
exceptional ethical, over-the-counter and aesthetic products to its customers
in more than 100 countries around the world, ultimately providing a unique
Stiefel skin health experience. Stiefel is also committed to improving today's
treatments and exploring tomorrow's innovations. Each year, the company
invests more than $100 million in developing the most advanced skin health
solutions. To learn more about Stiefel, visit www.stiefel.com.

Cautionary statement regarding forward-looking statements
Under the safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995, GSK cautions investors that any forward-looking statements
or projections made by GSK, including those made in this announcement, are
subject to risks and uncertainties that may cause actual results to differ
materially from those projected. Factors that may affect GSK' s operations are
described under 'Risk Factors' in the 'Business Review' in the company' s
Annual Report on Form 20-F for 2008.

Trademarks
Brand names appearing in italics throughout this document are trademarks of
GSK and Stiefel.

Registered in England & Wales:
No. 3888792

Registered Office:
980 Great West Road
Brentford, Middlesex
TW8 9GS

SOURCE GlaxoSmithKline plc

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