GSK to buy stake in generic drug maker
May 13 2009 by Iain Laing, The Journal
PHARMACEUTICAL company GlaxoSmithKline is to buy a 16% stake in Aspen Pharmacare, Africa’s biggest generic drug manufacturer.
The company, which employs around 1,000 people in Barnard Castle and hundreds in Cumbria, said the deal would in return give Aspen the right to distribute Glaxo products in South Africa.
Glaxo also will divest eight medicines and a factory in Germany to Johannesburg-based Aspen. The stake in Aspen is worth around £300m. The agreement extends a deal signed by the two companies in July under which Glaxo supplies generic versions of its medicines to Aspen.
The transaction will triple the number of Glaxo brands in emerging markets, part of chief executive Andrew Witty’s strategy to offset the impact of generic competition.
Cheap copies of the antidepressant Paxil CR and another four products cut £450m from Glaxo’s first-quarter sales, the company said last month.
Mr Witty said in July the Aspen venture is an example of the drugmaker’s strategy to find collaborations and targeted acquisitions in emerging economies.
Aspen said: “GSK and Aspen have fostered a strong and mutually beneficial relationship over several years.” Aspen distributed a number of selected Glaxo prescription products in South Africa and was awarded voluntary licences by GSK for the manufacture of antiretrovirals prior to the expiration of applicable patents, the statement said.
Glaxo said in its annual results earlier this year that it is looking to increase its annual cost reductions from £700m to £1.7bn by 2011 as a way of seeing it through the continuing economic slump.
It has already said it is losing 2,000 positions in the UK out of the 10,000 roles axed globally since 2007.
