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GSK to acquire Genelabs Technologies

GlaxoSmithKline and Genelabs Technologies have announced that they have entered into a definitive agreement for GSK to acquire the US-based biotech company Genelabs for approximately $57m

GlaxoSmithKline (GSK) and Genelabs Technologies have announced that they have entered into a definitive agreement for GSK to acquire the US-based biotech company Genelabs for approximately $57m (£35m).

Under the terms of the agreement, a subsidiary of GSK will commence a tender offer to acquire all outstanding shares (at $1.30 per share) of Genelabs common stock. Genelabs' directors have recommended that shareholders tender their shares in the offer.

Acquiring Genelabs will allow GSK to strengthen its R&D in novel therapies for the hepatitis C virus (HCV). Genelabs will become part of GSK's Infectious Diseases Centre for Excellence in Drug Discovery (ID CEDD).

"Genelabs has demonstrated a strong track record in HCV drug discovery and identified numerous novel classes of inhibitors that target unprecedented mechanisms in the virus's lifecycle," stated Zhi Hong, senior vice president of the ID CEDD. "This arrangement, combined with our other collaborations, will give GSK a broad HCV drug discovery platform addressing novel targets and innovative therapeutic approaches."

Currently, there is an unmet need for new drugs to treat HCV. The current treatment involves a combination of two therapies, with both drugs associated with significant side effects and the overall efficacy rate of the therapy only being 50 per cent.

Fred Driscoll, president and CEO of Genelabs said, "Through the efforts of our experienced scientific staff and other employees, we have generated highly differentiated compounds with the potential to address unmet medical needs of people with the HCV infection. GSK's world-class research and development organisation will allow us to accelerate our strategic vision of providing novel treatments that deliver tremendous value for patients."

The tender offer is expected to close in December 2008.

30th October 2008

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