LONDON GlaxoSmithKline (GSK.L) is to buy Basilea's (BSLN.S) new eczema drug Toctino for an initial 146 million pounds ($227 million) to boost its Stiefel dermatology business, the two companies said on Tuesday.
The Swiss biotech company is also entitled to further payments of up to 50 million pounds if the drug is approved in the United States, as well as double-digit percentage payments on U.S. sales beginning three years after launch.
Basilea shares gained 10 percent by 03.45 a.m. EDT on news of the cash injection, although analysts at Jefferies said a good chunk of the money would likely be spent developing experimental antibiotic ceftobiprole and other earlier-stage products.
Toctino, already on sale in 14 countries and in final stage Phase III clinical trials in the United States, had sales last year of 22 million pounds. Jefferies puts peak annual sales at $250 million.
The medicine is the only prescription drug specifically approved for severe chronic hand eczema in adults whose disease does not respond to potent topical steroids.
For GSK, Britain's biggest drugmaker, the deal marks a further bolt-on acquisition to build up its product line-up.
It is locked in a $2.6 billion battle to buy long-time U.S. partner Human Genome Sciences HGSI.O to get full access to a new drug for lupus and experimental medicines for heart disease and diabetes.
($1 = 0.6447 pound)
(Reporting by Ben Hirschler; Editing by Dan Lalor and Hans-Juergen Peters)