Glaxo targets emerging markets for acquisitions, tie-ups

UK pharmaceutical company GlaxoSmithKline yesterday said that it will continue to pursue acquisitions and alliances in emerging markets, as, like other drug makers, it seeks to tap rising healthcare spending in emerging economies, the new battleground for the world's top drugmakers as sales stall in Western markets.

Abbas Hussain, the company's head of emerging markets, said his three-pronged strategy included scaling up branded generics, winning extra vaccine business and pushing traditional patented medicines into developing markets.

"It's very reasonable to say that my ambition is that we will beat the market growth rate," he told reporters ahead of a briefing for investors. "Emerging markets today are roughly worth 50 billion pounds ($81 billion). By 2015 this should double and by 2020 you are looking at emerging markets in size being equivalent to the US market and the major five in Europe."

The new middle classes of Asia, Latin America, the Middle East and Africa are luring the world's top pharmaceutical groups as generic competition and disappointing new drug pipelines erode sales growth in the United States and Europe.

GlaxoSmithKline has made an aggressive push into emerging markets. Among its initiatives have been the purchase of assets from rival Bristol-Myers Squibb Co and Belgium's UCB SA, and alliances with South Africa's Aspen Pharmacare Holdings Ltd and India's Dr Reddy's Laboratories Ltd to sell those companies' drugs in a variety of emerging markets.

Hussain said investors can expect more such alliances. "I think it's a great way to go as you are sharing the risk, and it makes good financial sense," he said, although he acknowledged it can be more complicated than a straightforward acquisition.