Valeant acquires GSK's Zovirax

Valeant Pharmaceuticals' Biovail Laboratories has signed a deal under which it will acquire all US and Canadian rights to non-ophthalmic topical formulations of GlaxoSmithKline's (GSK) herpes drug Zovirax (acyclovir) for $300m.

Biovail was already the exclusive distributor of the product in the US, where the deal will allow the company to keep more of the profits from the drug. Biovail did not previously have rights to the drug in Canada.

"The current distribution agreement between GSK and Biovail was problematic for both companies and this new arrangement should solve this issue for both organisations,” Valeant CEO J Michael Pearson said in a statement.  "We believe that our sales and marketing organisations in the United States and Canada have the ability to revitalise and grow the brand."

Zovirax ointment and cream are indicated for genital herpes and cold sores. Biovail paid $133m for the marketing rights to the topical formulations of Zovirax in a ten-year deal signed between the companies in 2001. In late 2002, Biovail announced that it had extended its existing 10-year agreement with GSK for the marketing rights to 20 years for an additional payment of $40m.