GlaxoSmithKline To Acquire ID Biomedical Corporation

Philadelphia, PA - GlaxoSmithKline plc and ID Biomedical Corporation recently announced a definitive agreement for GSK to acquire ID Biomedical, an integrated biotechnology company dedicated to the manufacturing and development of innovative vaccine products, including influenza vaccines. ID Biomedical has facilities in Canada and in the United States.

GSK's proposed acquisition of ID Biomedical reflects its continuing commitment to address the public health need for increased supply of influenza vaccines. ID Biomedical is currently in the process of expanding and upgrading its Canadian manufacturing facilities, which are expected, beginning in 2007, to produce around 75 million doses per year of ID Biomedical's Fluviral egg based influenza vaccine.

ID Biomedical will become a wholly-owned subsidiary of GSK. Under the terms of this agreement, the shareholders of ID Biomedical will be entitled to receive CDN$ 35 per share for a value of approximately CDN$1.7 billion (US$ 1.4 billion-GB pnds stlg 0.8 billion). This represents a premium of 13 percent over the closing price of the shares on 6 September 2005, and a premium of 30 percent over the 20-day average share price. At closing, GSK will also assume responsibility for ID Biomedical's net debt which was US$77 million at June 30, 2005. In addition, upon execution of the agreement, GSK has agreed to loan ID Biomedical up to US$120 million to repay term debt and finance its cash requirements to the anticipated closing date. The acquisition, which has been approved unanimously by both GlaxoSmithKline and ID Biomedical's Boards of Directors, is subject to the approval of ID Biomedical's shareholders, applicable regulatory clearances and certain other conditions. The transaction is expected to close by the end of 2005 or early 2006.

"GSK has moved quickly over the past few months to meet the growing demand for flu vaccines worldwide and to transform GSK into one of the leading global influenza vaccine manufacturers," said Jean-Pierre Garnier, Chief Executive Officer of GSK. "The proposed acquisition of ID Biomedical is a unique strategic opportunity to increase current capacity of classic flu vaccines, to provide us with increased capacity for next generation flu vaccines under development and to help GSK prepare for the threat of a flu pandemic. "

"We are very pleased with this agreement," said Anthony Holler, Chief Executive Officer of ID Biomedical. "GSK's influenza vaccine business is complementary to our own and with GSK's capital, technologies and international reach, we can realize benefits that ID Biomedical simply could not obtain on its own. This is advantageous for our employees and shareholders."

In addition to acquiring an influenza vaccine business with sales to the Canadian public market, this transaction would enhance GSK's vaccine presence in the US where Fluarix, GSK's existing influenza vaccine, received FDA approval at the end of August. ID Biomedical's Fluviral(TM) has been granted fast track status by the US Food and Drug Administration (FDA) and is eligible for priority review.

"Combined with our recent investment to double influenza vaccine production capacity at our facility in Dresden, Germany, and our recent purchase of the Marietta vaccine site in Pennsylvania, USA where we will develop new flu vaccine production technology, the acquisition of ID Biomedical could also represent a major step in GSK's approach against pandemic flu threat," added Jean Stephenne, President of GSK Biologicals, the vaccines division of GSK. "GSK is also developing an improved flu vaccine for the elderly."

Rothschild acted as financial advisor to GSK on this transaction. UBS acted as financial advisor to ID Biomedical on this transaction.

SOURCE: GlaxoSmithKline plc