[Ip-health] GSK announces South African tie-up to drive growth in emerging markets

[Michelle Childs]

http://www.apmhealtheurope.com/story.php?numero=12230

Wednesday, 23 July 2008 08:11 GMT

GSK announces South African tie-up to drive growth in emerging markets
LONDON, July 23 (APM) - GlaxoSmithKline on Wednesday announced
ambitions to expand significantly into emerging markets through a deal
with South African-based pharma Aspen, the largest generics
manufacturer in the southern hemisphere.

GSK said in a statement emerging markets are forecast to grow by 13% -
triple traditional Western markets - and will account for 40% of
growth in the worldwide pharmaceutical market by 2020.

It said it has already established a new internal business model and
prioritised investments in capacity and regulatory expertise to
strengthen its existing "strong geographical footprint in emerging
market countries".

It believes the licensing deal between GSK and Aspen, and the South
African firm's joint venture partner Strides Arcolab, signals a
"significant new strategy from GSK to accelerate sales growth in
emerging markets".

Andrew Witty said in the statement, ahead of GSK's Q2 results due out
later on Wednesday, his first results' announcement as CEO: "Today's
announcement demonstrates our intention to catalyse GSK's sales growth
in emerging markets where growth in both population and economic
prosperity is leading to increased demand for branded pharmaceuticals.

"This collaboration gives us access to a renewable, high quality and
competitively priced source of branded pharmaceuticals in high-demand
therapeutic areas. Aspen, through its own pipeline and that of its
joint venture with Strides Arcolab has a product portfolio of over 450
molecules and 1,200 products which complements our own product
portfolio and will enable us to deliver more medicines of value to
more patients in these countries."

GSK said that under the tie-up, it gains access to a diverse portfolio
and future pipeline of branded pharmaceuticals on a license and supply
basis in countries across emerging markets.

"Products will be competitively sourced by GSK through access to low-
cost manufacturing from Aspen and its partners," it added.

TERMS

GSK said it will register register the products in markets where they
have not already been approved as well as assuming responsibility for
distribution and commercialisation, and expects to be able to
commercialise the first group of products selected from 2010 onwards.

Aspen will continue to market these products in Sub-Saharan Africa and
other countries. GSK will make limited up-front payments to Aspen to
cover any additional regulatory work required to file the initially
selected products in the appropriate countries. The majority of
payments from GSK to Aspen will be made via a profit-sharing
arrangement based on actual sales, GSK added.

The company claims to be Africa's largest pharma manufacturer and a
major supplier of branded and generic medicines. It also claims to be
one of the leading global players in generic anti-retrovirals.

Group revenue in 2007 was 4 billion Rand (339 million euros) while
operating profit amounted to 1.1 billion Rand.

nh/rw

nick.hudson@apmnews.com
[12230] 23/07/2008 08:11 GMT - INDUSTRY





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Michelle Childs
Head of European Affairs
  Knowledge Ecology International
www.keionline.org / www.cptech.org
Phone:+44(0)207 226 6663 ex 252
Email: michelle.childs@keionline.org