After watching his rivals consolidate and generic competition squeeze the company's earnings, GlaxoSmithKline plc (NYSE:GSK) chief executive Andrew Witty started allying to expand in emerging markets and
shift money from pharmaceuticals into vaccines and consumer businesses.
The latest deal is a revenue-sharing agreement with India's Dr. Reddy's Laboratories Ltd. (NYSE:RDY), where they will tap various emerging markets, excluding India. GSK will gain exclusive access to
Dr. Reddy's portfolio and future pipeline of more than 100 branded pharmaceuticals in therapeutic segments such as cardiovascular, diabetes, oncology, gastroenterology and pain management. The products will be manufactured by Dr. Reddy's and licensed and supplied by GSK in various countries in Africa, the Middle East, Asia-Pacific and Latin America.
One week ago, London's GSK spend $31 million on a
40% stake in a joint venture to make flu vaccines for China. The partner is Shenzhen Neptunus Interlong Bio-Technique Co. Ltd. GSK plans to be the majority owner of the JV within two years. Last month, the drugmaker
expanding on an existing alliance, acquiring a 16% stake in South African generic drug maker Aspen Pharmacare Holdings Ltd. for about $390 million.
As he avoided the thought of megamergers, one of Witty's most
innovative deals came in announcing a JV with Pfizer Inc. (NYSE:PFE), where the two pooled their HIV/AIDS programs. Roger Longman of Windhover Research said the deal unlocks the assets from the companies' bureaucracies, creating managerial and scientific independence.
GSK is also using
acquisitions to bolster its business, but another interesting -- and unusual -- deal came when it and rivals Novartis AG (NYSE:NVS), Roche Holding AG (SWX:ROG) and Eli Lilly and Co. (NYSE:LLY) came together to
back a single biotech company -- Aileron Therapeutics. Apparently, the drug giants think the stapled peptides Aileron is working on could emerging as a major class of therapeutics akin to small molecules, antibodies and vaccines. -
Baz Hiralal
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