GlaxoSmithKline has sold its US penicillin business to Dr Reddy’s Laboratories as part of a strategy to focus on its new drugs.

Under the terms of the deal, the financial details of which were not disclosed, GSK will transfer ownership of its penicillin manufacturing site in Bristol, Tennessee to Dr Reddy's, plus the US rights to the antibiotics Augmentin (amoxicillin clavulanate) and Amoxil (amoxicillin). GSK will retain the rights for the brands elsewhere.

Jean-Paul Reynaud, GSK's senior vice president for antibiotics and emerging markets supply, said the sale of the site and divestiture of these products in the USA "are a positive step forward" and will allow the company to "focus resources on our newer portfolio of differentiated products”.

Abhijit Mukherjee, head of Dr Reddy's global generics business, said the acquisition "allows us to enter the US penicillin-containing antibacterial market segment" and provides "manufacturing capabilities that did not previously exist" within the company. He added that the deal "is in line with our strategy to significantly scale up our generics business in North America while providing an opportunity to explore additional synergy with our other businesses".

The firms have been in partnership since last year through an agreement which saw GSK gain access to Dr Reddy's portfolio and future pipeline of around 100 branded pharmaceuticals in therapeutic areas such as diabetes, cancer and pain management.