GlaxoSmithKline and Valeant Pharmaceuticals announce worldwide collaboration agreement for retigabine

This press release is intended for business journalists and analysts/investors. Please note that this release may not have been issued in every market in which GSK operates.

London, UK, & Aliso Viejo, California

GlaxoSmithKline (GSK) and Valeant Pharmaceuticals International (NYSE: VRX) today announced that they have entered into an exclusive worldwide collaboration agreement for the investigational drug retigabine, a first in class neuronal potassium channel opener for treatment of adult epilepsy patients with refractory partial onset seizures. Retigabine has shown robust efficacy and safety as demonstrated in two large, completed Phase III trials conducted in patients with refractory epilepsy receiving treatment with up to three antiepileptic drugs (AEDs). Valeant and GSK plan to file a New Drug Application in the US and a Marketing Authorisation Application in Europe by early 2009. The retigabine programme also includes an ongoing study in patients with post-herpetic neuralgia (PHN), a painful and common complication of shingles.

Under the terms of the agreement, Valeant will grant GSK worldwide development and commercialisation rights to retigabine, VRX698 and the other back-up compounds from the potassium channel opener discovery programme in exchange for an upfront payment of $125 million to Valeant. Additionally, GSK will pay Valeant up to $545 million based on the achievement of certain regulatory, development and commercialisation milestones and the development of additional indications for retigabine. Valeant will co-commercialise with GSK and will share up to 50% of net profits within the US, Canada, Australia, New Zealand and Puerto Rico, and will receive up to a 20% royalty on net sales of retigabine outside those regions. The two companies will jointly fund all global research and development expenses for retigabine, and GSK will completely fund the development of VRX698 and the other back-up compounds from the potassium channel opener discovery programme. Valeant could receive up to an additional $150 million based on the achievement of certain regulatory, development and commercial milestones for VRX698 and the back-up compounds and double-digit royalties on worldwide sales.

“GSK is looking forward to working with Valeant to provide important medicines like retigabine to the medical community and to the patients we serve,” commented Steve Stefano, Senior Vice President, GSK US NeuroHealth Division. “There is a significant need for novel anti-epileptic drugs, as almost one-third of patients with epilepsy continue to experience seizures despite treatment with currently available medications. We believe that retigabine could potentially play a significant role in improving the management of epilepsy and is a welcome addition to GSK’s portfolio.”

“We were pleased with the significant interest shown in retigabine, and we have selected GSK as a collaborator because we believe they are ideally suited and strongly committed to the continued development of this important compound,” stated J. Michael Pearson, Chairman and Chief Executive Officer of Valeant. “GSK’s development expertise and strong commercial infrastructure will be critical to maximising the worldwide potential of retigabine. We believe this collaboration will strengthen our ability to bring this medicine to patients suffering from epilepsy and a variety of other conditions.”
Cautionary statement regarding forward-looking statements
Under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, GSK cautions investors that any forward-looking statements or projections made by GSK, 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 GSK’ s operations are described under ’Risk Factors’ in the ’Business Review’ in the company’ s Annual Report on Form 20-F for 2007.

Valeant Pharmaceuticals forward looking statements
This press release contains forward-looking statements, including, but not limited to, statements regarding expectations or plans of development program for retigabine and the potential role retigabine could play in managing epilepsy and in treating other indications, and the commercial opportunity retigabine may present for Valeant. These statements are based upon the current expectations and beliefs of Valeant’s management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties related to the clinical development of retigabine, the fact that adverse events are not always immediately apparent even in well designed clinical trials, regulatory approval processes, the potential that competitors may bring to market drugs or treatments that are more effective of more commercially attractive than retigabine, and other risks and uncertainties discussed in the company’s filings with the SEC. Valeant wishes to caution the reader that these factors are among the factors that could cause actual results to differ materially from the expectations described in the forward-looking statements. Valeant also cautions the reader that undue reliance should not be placed on any of the forward-looking statements, which speak only as of the date of this release. The company undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this release or to reflect actual outcomes.