Healthcare Industry News:  Clindamycin 

Biopharmaceuticals Mergers & Acquisitions Dermatology

 News Release - October 23, 2006

Connetics Corporation and Stiefel Laboratories, Inc. Sign Definitive Merger Agreement

Strategic Combination to Create World's Premier Dermatology Company

Connetics' Stockholders to Receive $17.50 per Share in Cash, Representing a 62% Premium to Four-Week Average Closing Price

PALO ALTO, Calif.--(HSMN NewsFeed)--Connetics Corporation (NASDAQ:CNCT ), a specialty pharmaceutical company that develops and commercializes dermatology products, today announced that it has signed a definitive merger agreement with Stiefel Laboratories, Inc., a privately held company based in Coral Gables, Florida. Upon the closing of the transaction, holders of Connetics' common stock will receive $17.50 per share in cash, representing a 62% premium to Connetics' average closing price for the past four weeks. The aggregate value to be received by Connetics' stockholders is approximately $640 million.

Thomas G. Wiggans, Chairman and Chief Executive Officer of Connetics, said, "The combination of Stiefel and Connetics will create the world's premier dermatology company with a strong global presence in both branded and generic markets, dozens of marketed products and the most robust development pipeline in the industry. After the combination, Stiefel Laboratories, Inc. will have more than 3,500 employees worldwide, with more than 30 subsidiaries and sales in more than 100 countries.

"This transaction delivers significant value to our stockholders and the combined entity will have substantial resources to bring innovative dermatology products to patients around the globe," Mr. Wiggans continued. "The combined company will be positioned to continue the growth and build on the extraordinary success experienced by both Connetics and Stiefel. We look forward to putting together two powerful corporate cultures."

Charles W. Stiefel, Chairman and Chief Executive Officer of Stiefel Laboratories, said, "The combination of Connetics and Stiefel Laboratories demonstrates our continued commitment to be the global leader in dermatology. We are very impressed with the innovative products, cutting-edge technology and talented workforce at Connetics. Our company will have an expansive product portfolio and pipeline for major disease categories across the field of dermatology."

The parties anticipate closing the transaction in late 2006 or early 2007. The closing is subject to approval by holders of a majority of Connetics' outstanding common stock, antitrust clearance and other customary closing conditions. Goldman, Sachs & Co. acted as financial advisor to Connetics in connection with the transaction. The transaction was unanimously approved by Connetics' Board of Directors.

About the Transaction

In connection with the proposed merger, Connetics will file a proxy statement with the Securities and Exchange Commission (SEC). Investors and security holders are advised to read the proxy statement, when it becomes available, and any other relevant documents filed by Connetics with the SEC because they will contain important information about the proposed merger. Investors and security holders will be able to obtain a free copy of the proxy statement, when available, and other documents filed by Connetics, from the SEC website at or by contacting Connetics' investor relations office at (650) 843-2851.

Connetics' directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Connetics in connection with the transaction. A description of certain of the interests of directors and executive officers of Connetics is set forth in the amended proxy statement for Connetics' 2006 annual meeting of stockholders, which was filed with the SEC on April 21, 2006. Investors and security holders may obtain additional information regarding the interest of such participants by reading the proxy statement regarding the merger when it becomes available.

About Connetics Corporation

Connetics Corporation is a specialty pharmaceutical company focused on the development and commercialization of innovative therapeutics for the dermatology market. The Company's commercial products are OLUX® (clobetasol propionate) Foam, 0.05%; Luxiq® (betamethasone valerate) Foam, 0.12%; Soriatane® (acitretin) capsules; Evoclin® (Clindamycin) Foam, 1%; and Verdeso(TM) (desonide) Foam, 0.05%. Connetics is developing multiple products including Primolux(TM) (clobetasol propionate) Foam, 0.05%, a super high-potency topical steroid formulation to treat atopic dermatitis and plaque psoriasis; Extina® (ketoconazole) Foam, 2%, to treat seborrheic dermatitis; and Velac® (a combination of 1% Clindamycin and 0.025% tretinoin) Gel, to treat acne. Connetics' product formulations are designed to improve the management of dermatological diseases and provide significant product differentiation. For more information about Connetics and its products, please visit

About Stiefel Laboratories, Inc.

Founded in 1847, Stiefel Laboratories, a privately held company, is the world's largest independent pharmaceutical company specializing in dermatology. Its global network is comprised of more than 30 wholly-owned subsidiaries, including manufacturing plants in six countries, R&D facilities on three continents, and products marketed in over 100 countries worldwide. Stiefel supplements its R&D by aggressively seeking relationships with companies around the World. For more information about Stiefel Laboratories and its products, please visit

Forward-Looking Statements

Except for historical information, this press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act. All statements included in this press release that address activities, events or developments that Connetics expects, believes or anticipates will or may occur in the future, including, particularly, statements about the potential benefits of the proposed combination to Connetics' stockholders, customers, partners and employees, the consequences of the proposed combination, and the expected closing of the proposed combination, are forward-looking statements. All forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. The words "predict," "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could affect Connetics' actual results include, but are not limited to the risk the transaction is not consummated or is not consummated within the expected timeframe, the risk that the expected benefits of the proposed combination are not realized, and the risks and other factors that are discussed in documents filed by Connetics with the Securities and Exchange Commission from time to time, including Connetics' Annual Report on Form 10-K/A for the year ended December 31, 2005 and the Form 10-Q for the quarter ended June 30, 2006. All forward-looking statements are based on assumptions made by Connetics' management based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Forward-looking statements represent the judgment of the Company's management as of the date of this release, and Connetics disclaims any intent or obligation to update any forward-looking statements.

Source: Connetics

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

FindReps - Find Great Medical Independent Sales Reps without recruiter fees.
FindReps - available on the Apple App Store for iPhone and iPad.