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GlaxoSmithKline
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 24/07/2009
[Company watch]
GSK to Distribute Dr. Reddys Generics in Emerging Markets
GlaxoSmithKline has partnered up with Dr. Reddys Laboratories in a deal that will allow GSK to sell Dr. Reddys generic pharmaceutical products in emerging markets. The targeted countries include China, though Dr. Reddys home market of India is excluded.
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by: ChinaBio Today
GlaxoSmithKline has partnered up with Dr. Reddys Laboratories in a deal that will allow GSK to sell Dr. Reddys generic pharmaceutical products in emerging markets. The targeted countries include China, though Dr. Reddys home market of India is excluded. GSK has the right to select products from Dr. Reddy’s portfolio of over 100 branded pharmaceuticals, which GSK will distribute through its established sales infrastructure.
The partnership helps both companies. GSK has been diversifying its offerings away an emphasis on high-cost blockbuster drugs. It currently offers eight vaccines in China from its GSK Biologicals division and expects to add two more before the end of the year. At least some of the 20 additional vaccines the company has in development will also eventually find their way to China. The problem facing GSK is that their relatively high-cost products sell only to the China private pay sector. The company needs more products that can compete with Chinese indigenous producers of generic drugs. Last month, GSK announced a flu vaccine joint venture with Shenzhen Neptunus Interlong Bio-Technique Co. Ltd., which will use GSK’s vaccine adjuvant. GSK will own a 40% stake in the JV in exchange for an investment of $34 million.
In 2008, GSK established an alliance with South African generic drug manufacturer Aspen PharmaCare. Under the terms of the deal, GSK can license drugs from Aspen’s portfolio, which GSK will then seek to have approved in specific markets. GSK was thought to be especially interested in Aspen’s anti-retroviral treatments for AIDS. On the high-end side of the pharmaceutical spectrum, GSK announced a $40 million in 2007 for a Shanghai R&D center, which will be the company’s designated site world-wide for neurodegenerative disease research. Within eight years, the company expects to have 1,000 scientists at work in the facility. It will be responsible for the entire range of drug development activities, not just drug discovery or clinical trials. The Shanghai center will seek drugs that treat Parkinson\'s disease, Alzheimer\'s disease and multiple sclerosis. For its part, Dr. Reddy is looking for low-cost ways to expand revenues while it seeks to integrate its 2006 acquisition of Germanys Betapharm Arzneimittel GmbH for 480 million euros ($615 million). After the acquisition, Germany changed payment rules for its healthcare, forcing Dr. Reddy’s to write down the division by 210 million euros ($296 million). The company says it doesn’t expect to be back in the M&A market until 2011. Under the new agreement, GSK will report the revenues, which will be shared with Dr. Reddy’s. In some markets, products will be co-marketed. In the release describing the deal, which was announced last month, the expected markets include Africa, the Middle East, Latin America and Asia Pacific. Dr. Reddy’s, which was formed as a producer of APIs, expanded to generic drugs and then moved into drug development, now produces drugs for cardiovascular, diabetes, oncology, gastroenterology and pain management indications. |
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