Baxter has said it will sell an authorised generic version of Pfizer’s antibiotic Zithromax, which recently lost patent protection in the US, in the first deal of its kind for the company.

Pfizer will make and supply the active pharmaceutical ingredient for the generic, and Baxter will market it, said the companies. Combined sales of Zithromax (azithromycin) and the extrended-release form Zmax were $1.5 billion in 2005, but are expected to decline sharply now copycat products are available.

In January, pharmacy benefit manager Medco reported that the generic dispensing rate for azithromycin reached more than 90% as of the first week in January, just weeks after the November launch of Zithromax rivals, a level which the firm describes as "unprecedented."

Last month, Pfizer filed a petition with the US Food and Drug Administration (FDA) arguing that generics sold by Teva and Sandoz are mislabelled and should be withdrawn from sale, but at present they remain on the market.

Expands in China

Meanwhile, Baxter says it wants to invest $60 million over the next five years to expand production capacity at its four manufacturing facilities in China. The company wants to support sales growth in company's medication delivery and renal businesses.

In 2005, Baxter's sales in China were about $100 million, but it expects revenues there to more than double by 2010.