Healthcare Industry News:  sanofi-aventis 

Biopharmaceuticals Mergers & Acquisitions

 News Release - October 9, 2006

GlaxoSmithKline to Acquire CNS, Inc.

Innovative, high-growth Breathe Right and FiberChoice brands extend Consumer Healthcare portfolio

PHILADELPHIA and MINNEAPOLIS, Oct. 9 (HSMN NewsFeed) -- GlaxoSmithKline (LSE: GSK ; NYSE: GSK ) and CNS, Inc. (Nasdaq: CNXS ) today announced execution of a definitive agreement for GSK to acquire CNS, the manufacturer of Breathe Right® nasal strips and FiberChoice® dietary fiber supplements for $37.50 per share in cash, valuing the transaction at approximately $566 million. The merger consideration represents a premium of 31% over the trading price of CNS's common stock at close of business on October 6, 2006. The transaction, which is expected to close by early 2007, is subject to customary conditions including CNS stockholder approval and antitrust clearance under the Hart-Scott-Rodino Act.

CNS, based in Minneapolis, Minnesota, USA, reported through June 2006, 12- month sales of $118.5 million, growth of 18% over the previous 12-month period ended June 30, 2005. The US market generates 86% of the company's sales. Breathe Right branded products are marketed in 27 countries. FiberChoice fiber supplements are marketed solely in the US.

Commenting on this acquisition, John Clarke, President, GSK Consumer Healthcare, said: "This outstanding business provides a great global growth opportunity for GSK. CNS is a well-managed company. Its two major brands, Breathe Right and FiberChoice, fit with our growth strategy and are great additions to our portfolio. The opportunity for growth through geographic expansion and pipeline innovation make this acquisition an exciting prospect."

"This transaction will deliver excellent value to our shareholders," said Marti Morfitt, President and CEO of CNS. "I am proud of our achievements at CNS and the success we have built around our brands, and am happy that our good work will continue with GSK as these brands realize their worldwide potential. GSK's professionalism and innovative culture, with their track record of successfully integrating brands and people, will ensure a smooth transition."

Breathe Right strips are the leading nasal strip, and FiberChoice supplements are a fast-growing line of dietary fiber supplements. Both brands are supported by patents in the U.S. and key markets worldwide, and by scientific evidence for their product claims. The sales growth of Breathe Right and FiberChoice is driven by consumer insights and a focused strategy that has been very successful: Breathe Right has delivered 12% and FiberChoice 54% sales compound annual growth rates, respectively, over the past three years. For GSK, the transaction will be neutral to earnings in 2007, and accretive from 2008.

The proposed transaction with GSK follows a review of potential acquirers conducted by CNS with the assistance of its financial advisor. Sawaya Segalas & Co., LLC acted as exclusive financial advisor to CNS in connection with the transaction and delivered a fairness opinion to CNS's Board of Directors.

CNS's brands are:

The Breathe Right family of products that include a line of nasal strips that open nasal passages to offer better breathing. Breathe Right strips treat congested breathing that is suffered by many consumers at some point during the year, caused by colds (94% people/year) and allergies (69% people/year) (1).

The FiberChoice family of products offers a line of fiber supplements in a convenient tablet form with a 'Fiber for Health' positioning. FiberChoice is a fast-growing brand of fiber supplements.

(1) US AC Nielsen Marketing Mix Study, February 13, 2006

About GlaxoSmithKline

GlaxoSmithKline -- one of the world's leading research-based pharmaceutical and healthcare companies -- is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For company information, visit

About GlaxoSmithKline Consumer Healthcare

GlaxoSmithKline Consumer Healthcare is one of the world's largest over- the-counter consumer healthcare products companies. Its more than 30 well- known brands include the leading smoking cessation products, Nicoderm® CQ® and Commit®; many medicine cabinet staples, including Panadol®, Abreva®, Aquafresh®, Sensodyne® and Tums®; and nutritional healthcare products such as Lucozade®, Horlicks® and Ribena®.

About CNS, Inc.

CNS, based in Minneapolis, designs and markets consumer healthcare products including Breathe Right® nasal strips and FiberChoice® dietary fiber supplements. The company focuses on products that address important consumer needs within the self-care market, including better breathing and digestive health. Its common stock is listed on the Nasdaq National Market under the ticker symbol "CNXS". More information about CNS and its products is available at

Caution Regarding Forward-Looking Statements

Any statements made regarding the proposed merger transaction between CNS, Inc., and GlaxoSmithKline plc, the expected timetable for completing the transaction, the satisfaction of closing conditions, timing or satisfactory receipt of regulatory or CNS stockholder approvals, future products or market growth, and any other statements regarding CNS' future expectations, beliefs, goals or prospects are forward-looking statements which are subject to risks and uncertainties. For a more complete list and description of such risks and uncertainties, refer to CNS' Annual Report on Form 10-K for the year ended March 31, 2006, and Quarterly Report on Form 10-Q for the period ended June 30, 2006, as well as other filings by CNS with the Securities and Exchange Commission (the "SEC"). Actual results may differ materially from those contained in the forward-looking statements in this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. CNS undertakes no obligation and does not intend to update any forward-looking statements after the date of this document, whether as a result of new information, future events, developments, changes in assumptions or otherwise.

Under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995, GlaxoSmithKline cautions investors that any forward- looking statements or projections made by GlaxoSmithKline, including those made in this announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Factors that may affect the Group's operations are described under 'Risk Factors' in the Operating and Financial Review and Prospects in GlaxoSmithKline's Annual Report 2005.

Important Merger Information

In connection with the proposed merger with GlaxoSmithKline plc, the Company will file a proxy statement with the SEC. Stockholders and investors are advised to read the proxy statement when it becomes available because it will contain important information about the merger and the Company. Stockholders and investors may obtain a free copy of the proxy statement (when available) and other documents filed by the Company with the SEC at the SEC's web site at Free copies of the proxy statement, once available, and the Company's other filings with the SEC, may also be obtained from the Company at by clicking on the "Investors" tab and then following the link at "Financial Information" to "SEC Filings." Free copies of the Company's filings may be obtained by directing a written request to CNS, Inc., 7615 Smetana Lane, Eden Prairie, Minnesota 55344, Attention: Samuel E. Reinkensmeyer or by telephone at 952-229-1510.

Participants in the Solicitation

The Company and its directors, executive officers and other members of its management may be deemed to be soliciting proxies from the Company's stockholders in favor of the merger. Investors and stockholders may obtain more detailed information regarding the direct and indirect interests in the merger of persons who may, under the rules of the SEC, be considered participants in the solicitation of the Company's stockholders in connection with the merger by reading the preliminary and definitive proxy statements regarding the merger, which will be filed with the SEC. Information about the Company's directors and executive officers may be found in the Company's definitive proxy statement filed with the SEC on July 7, 2006. These documents will be available free of charge once available at the SEC's web site at or by directing a request to the Company as described above.

Breathe Right and FiberChoice are registered trademarks of CNS, Inc.

Commit, Abreva, Aquafresh, Panadol, Sensodyne, Tums, Lucozade, Horlicks and Ribena are trademarks of GlaxoSmithKline. Nicoderm is a trademark of Sanofi-Aventis in the US and is used under license by GlaxoSmithKline as Nicoderm CQ.
    Financial Notes
                                  CNS, Inc.
                         Consolidated Balance Sheets
                   (in thousands, except per share amounts)
                                                   March 31,
                     Assets                   2006           2005

    Current assets:
     Cash and cash equivalents               $4,152         $4,814
     Marketable securities                   48,439         55,936
     Accounts receivable, net of
      allowance for doubtful accounts
      of $100 in 2006 and $183 in 2005       17,667         15,030
     Inventories                              5,766          4,531
     Deferred income taxes                    1,791          1,968
     Prepaid expenses and
      other current assets                    1,486          1,435

    Total current assets                     79,301         83,714

    Property and equipment, net               1,308          1,118
    Product rights, net                       8,845          1,360
    Deferred income taxes                     1,020          1,023

                                            $90,474        $87,215

            Liabilities and Stockholders' Equity

    Current liabilities:
     Accounts payable                        $5,908         $7,770
     Accrued expenses                         7,557          7,177
     Accrued income taxes                     1,746          1,117

    Total current liabilities                15,211         16,064

    Stockholders' equity:
     Preferred stock - authorized
     8,484 shares; none issued or
     outstanding                                  0              0
     Common stock - $.01 par value;
      authorized 50,000 shares;
      issued 19,295 shares in 2006 and 2005     193            193
     Additional paid-in capital              64,068         61,693
     Treasury shares - at cost;
      5,316 shares in 2006 and 5,049
      shares in 2005                        (35,977)       (23,779)
     Retained earnings                       47,124         33,284
     Accumulated other comprehensive loss      (145)          (240)

    Total stockholders' equity               75,263         71,151

    Commitments and contingencies
     (notes 9, 10 and 11)

                                            $90,474        $87,215

    Financial Notes continued

                                  CNS, Inc.
                    Consolidated Statements of Operations
                   (in thousands, except per share amounts)

                                        For the Years Ended March 31,
                                      2006          2005           2004

    Net sales                      $112,644       $93,732        $86,980
    Cost of goods sold               33,185        26,704         26,904

    Gross profit                     79,459        67,028         60,076

    Operating expenses:
     Advertising and promotion       34,945        29,684         32,168
     Selling, general and
      administrative                 18,914        17,293         15,160

    Total operating expenses         53,859        46,977         47,328

    Operating income                 25,600        20,051         12,748

    Investment income                 1,219           935            725

    Income before income taxes       26,819        20,986         13,473

    Income tax expense                9,576         7,284          4,926

    Net income                      $17,243       $13,702         $8,547
Background Information on Breathe Right and FiberChoice

Who is Breathe Right indicated for?

The Breathe Right family of products was developed to deliver an effective way for more people to breathe better. Breathe Right nasal strips gently open nasal passages to help you breathe better -- without the use of medication -- on a variety of occasions:

- Benefit from a good night's sleep -- How well we sleep at night has a significant effect on our ability to concentrate and perform during the day. And for people whose sleep is regularly interrupted by snoring or congestion, the impact can be significant.

- Relieves nasal congestion from common ailments like cold and flu -- If you've ever suffered from allergies, sinusitis or other types of nasal congestion and breathing problems, you understand what a huge difference fast relief can make.

- Enhance athletic performance by reducing the amount of energy needed just to breathe.

Why is fiber important?

Health experts recommend a diet high in fiber to help promote good digestion and regularity. Research indicates that dietary fiber plays a role in preventing some serious conditions such as high cholesterol, colon diseases, heart disease and diabetes. However, most American diets are low in fiber. In fact, the typical American gets less than half the recommended 25-30 grams of daily fiber.

What is FiberChoice?

FiberChoice daily fiber supplements offer consumers an effective, convenient, great-tasting way to supplement their daily intake of dietary fiber. Each dose of FiberChoice gives you four times the fiber content you get from other fiber pills. FiberChoice contains inulin, an all-natural dietary fiber source found in fruits and vegetables. Inulin helps boost calcium absorption.

Source: GlaxoSmithKline

Issuer of this News Release is solely responsible for its content.
Please address inquiries directly to the issuing company.

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