Switzerland’s Galderma has signed an agreement to acquire CollaGenex Pharmaceuticals of the USA and is paying around $420 million to get control of its fellow dermatology specialists.

Galderma will buy all the outstanding stock of CollaGenex for $16.60 per share, which represents a premium of around 30% on the latter’s closing price on Monday. However, once the deal was announced, CollaGenex stock shot up over 27% to $16.29.

What has attracted Galderma, which was created in 1981 as a joint venture between Nestle and L'Oreal as a specialty pharmaceutical company dedicated exclusively to dermatology. to the Pennsylvania-based firm is Oracea (doxycycline), CollaGenex's flagship product for the oral treatment of the skin condition rosacea. In July 2006, Oracea was the first US Food and Drug Administration-approved systemic product indicated for the condition.

Additionally, CollaGenex has just completed a Phase II trial of Col-118 for the treatment of the erythema associated with rosacea and is also developing becocalcidiol, which the firm says has the potential “to provide added benefits for the treatment of psoriasis”.

Commenting on the deal, Albert Draaijer, president of Galderma's US operations, said that Oracea will be an important complement to his firm’s own topical products, “providing improved options to treat a condition affecting more than 14 million Americans”.

The transaction is expected to close before the end of the second quarter of 2008.