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SmithKline sells drugs rights
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August 31, 2000: 12:36 p.m. ET
$2.86B sale will help secure approval for merger with Glaxo Wellcome
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NEW YORK (CNNfn) - Drug company SmithKline Beecham agreed Thursday to sell the rights to three drugs to two companies for $2.86 billion in cash in order to clear the way for its planned merger with Glaxo Wellcome.
SmithKline Beecham will sell the rights to its cancer drug Kytril -- used to treat nausea caused by chemotherapy, radiotherapy and operations -- to Roche Holding AG for $1.23 billion and its antiviral products Famvir and Vectavir/Denavir to Novartis AG for $1.63 billion.
SmithKline Beecham said the action was being taken to secure regulatory approval for its merger with Glaxo Wellcome, which has leading drugs in the same categories. Approval is pending in both the U.S. and Great Britain.
SmithKline Beecham will also pay Roche $400 million for the exclusive U.S. and Canadian rights to the heart medicine Coreg, bringing SmithKline Beecham's return for both deals down to $2.46 billion.
The sales of the drug rights are conditional on the completion of the Glaxo Wellcome merger.
Roche said in a statement that the acquisition of the Kytril rights will enable the company to concentrate on "key therapeutic areas with high growth potential."
SmithKline Beecham said the rights to Coreg allows it grow its presence in the cardiovascular area and enhances its presence is "this important therapeutic category."
Novartis said the acquisition of the two herpes drugs companies will have an immediate positive net effect on earnings. 
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SmithKline Beecham
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