Mergin' derma for $421M

CollaGenex agrees to cross-Atlantic takeover by Galderma

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LAUSANNE, Switzerland—Galderma Pharma S.A., a global specialty pharmaceutical company focused on dermatology, and Newton, Pa.-based CollaGenex Pharmaceuticals Inc. in late February announced a definitive merger agreement pursuant to which Galderma's U.S. holding company, Galderma Laboratories Inc., will acquire all of the outstanding shares of CollaGenex at a price of $16.60 per share in cash. This price represents approximately $420 million for the equity of CollaGenex. The transaction was unanimously approved by the boards of directors of Galderma and CollaGenex.

"Galderma is committed to provide innovative medical solutions to dermatology patients and physicians across the globe," says Humberto C. Antunes, CEO of Galderma. "CollaGenex' innovative products complement and enhance Galderma's portfolio. We admire the accomplishments of CollaGenex' employees and believe our combined organizations will be even better positioned to serve patient's needs."

He adds that the transaction should be neutral to Galderma's net income in 2008 and accretive as of 2009.

CollaGenex is known for launching Oracea, the first FDA-approved systemic product indicated for the treatment of rosacea, in July 2006. CollaGenex is also developing Col-118, an innovative product for the treatment of the erythema associated with rosacea. If approved, Col-118 would be the first effective treatment for erythema. In addition, CollaGenex is developing a product with the potential to provide added benefits for the treatment of psoriasis.

"The immediate implication for the U.S. market is very positive," says Albert Draaijer, president of Galderma's U.S. operations. "CollaGenex's oral rosacea therapy will be an important complement to Galderma's topical products, providing improved options that treat a condition affecting more than 14 million Americans."

"We are very proud of the accomplishments of the entire CollaGenex team over the past several years as we made our successful transition into dermatology and created the largest oral drug indicated for the treatment of rosacea in the U.S.," says Colin W. Stewart, president and CEO of CollaGenex. "We are pleased that Galderma recognizes the value that we have created, and we believe that this transaction provides compelling value for our shareholders."

The merger agreement provides for Galderma to acquire CollaGenex in a two-step transaction. The first step will consist of a cash tender offer for all outstanding shares of CollaGenex common stock at a price of $16.60 per share in cash. In the second step, the tender offer will be followed by a merger in which the holders of the outstanding shares of CollaGenex common stock not tendered in the offer will receive the same per share price paid in the tender offer, in cash. Upon completion of the merger, CollaGenex will become a wholly owned subsidiary of Galderma.

The tender offer will be conditioned upon the tender of a majority of the outstanding shares of CollaGenex common stock and will also be subject to regulatory clearances and other conditions. Certain holders of CollaGenex' Series D-1 Preferred Stock have entered into a separate agreement to sell their shares of preferred stock to Galderma immediately following the closing of the tender offer. The transaction is expected to close before the end of the second quarter 2008. 

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