Valeant buys US/Canadian rights to GlaxoSmithKline's Zovirax for $300 million

Canada-based Valeant Pharmaceuticals International (NYSE: VRX; TSX: VRX) says that its subsidiary, Biovail Laboratories International has signed agreements to acquire all US and Canadian rights to non-ophthalmic topical formulations of the anti-viral Zovirax (acyclovir) from UK drugs giant GlaxoSmithKline (LSE: GSK) for $300 million.

The transaction significantly increases profitability of the brand for BLS which had previously been the exclusive distributor in the USA, and expands BLS' geographic rights to include Canada. The transaction is subject to customary closing conditions, including Hart-Scott-Rodino regulatory clearance in the USA, the company noted.

"We believe that Zovirax is a strong brand with continuing growth opportunities," said Michael Pearson, Valeant’s chief executive. "The current distribution agreement between GSK and BLS was problematic for both companies and this new arrangement should solve this issue for both organizations. We believe that our sales and marketing organizations in the United States and Canada have the ability to revitalize and grow the brand," he added.