UPDATE 2-Glaxo boosts oral care with $170 mln Biotene buy
* Glaxo buying Biotene for $170 million * Transaction expected to complete by early 2009 * Move strengthens therapeutic oral healthcare portfolio
(Adds background on Glaxo diversification strategy)
LONDON, Oct 21 (Reuters) - GlaxoSmithKline Plc (GSK.L) is acquiring Biotene, a leading over-the-counter treatment for dry mouth, for $170 million in a move to bolster its consumer healthcare business.
The world's second-biggest drugmaker said on Tuesday the product would fit within its existing oral care portfolio, which includes Aquafresh and Sensodyne toothpaste, as well as denture products and other treatments.
The deal is its second bolt-on acquisition in a week and reflects the commitment of new Chief Executive Andrew Witty to broaden Glaxo's healthcare portfolio to reduce risk.
On Oct. 15 it agreed to buy Bristol-Myers Squibb Co's (BMY.N) mature products business in Egypt for $210 million in a drive to boost its presence in emerging markets.
Biotene had global sales in 2007 of around $50 million, up 17 percent on the previous year. Around two-thirds of sales are in the United States.
The transaction is subject to regulatory review by competition authorities in the U.S. and Europe, and is expected to complete by early 2009.
Glaxo is acquiring the brand from Laclede, a privately held company.
"This ... is a further step towards our goal in GSK of building and growing a diversified healthcare business," the company's head of consumer healthcare, John Clarke, said in a statement.
The Biotene range includes mouthwash, toothpaste, gel, spray and gum formulations for relieving dry mouth, or xerostomia, a condition that Glaxo said was as prevalent as dental sensitivity, affecting around one in five adults.
Glaxo will report third-quarter financial results on Wednesday, when Witty, who took over in May, is expected to give a progress report on his plans to diversify the business and reduce operating costs.
Some industry analysts believe Glaxo is in the market for substantially bigger deals to bulk up its non-prescription healthcare business, though finding an acquisition that stacks up financially may not be easy.
Over-the-counter healthcare products are in strong demand from both pharmaceutical and consumer goods companies because they engender fierce brand loyalty among users.
The result is that such products command high prices, as reflected in the fact that Glaxo is paying 3.4 times historic sales for Biotene.
Glaxo has lost out in the past in bidding for the over-the-counter healthcare businesses of both Pfizer Inc (PFE.N) and Boots to Johnson & Johnson (JNJ.N) and Reckitt Benckiser Group Plc (RB.L), respectively. (Editing by Will Waterman)
