GlaxoSmithKline is acquiring Bristol Myers Squibb’s mature products business in Egypt for $210 million.
The move marks GSK’s desire to drive sales and expand its pharma portfolio in emerging markets and the acquisition will make GSK the leading pharma company in Egypt with a market share of approximately 9%.
“This is an important step forward in GSK’ strategy to accelerate sales growth in emerging markets,” said Abbas Hussain, President of Emerging Markets at GSK.
“It will enable us to build and diversify our existing branded pharmaceuticals portfolio and signals our strong commitment to provide quality medicines to patients in Egypt and other countries in the Middle East and North Africa region.”
In May, just before Andrew Witty took over as GSK Chief Executive from Jean-Pierre Garnier, Witty announced that a new emerging markets region was the significant driver for growth in the future. This included Brazil, Russia, India, China and the Middle East.
At the time he said: “These places are already contributing close to 25% of today’s market growth and are forecast to grow even faster in the future, around triple the rate of western countries… It is essential that we have an operating structure that is dynamic and responsive to the opportunities in these markets.”
This acquisition follows the agreement GSK announced with South African pharma Aspen in July, which significantly extended GSK’s pharma portfolio in emerging markets.
Under the terms of the agreement, GSK will acquire 20 branded products that occupy leading market positions in four therapeutic areas in Egypt, including the antibiotic Duricef, the ACE inhibitors Capozide and Capoten, iron supplement Theragran-H and topical steroid Kenacomb. The combined sales of these products in 2007 totalled $48.5 million.
GSK will also take ownership of BMS’s manufacturing facility in Giza.
In addition, the UK drug giant will also have the ability to export generic versions of the acquired products to markets outside of Egypt and creating further opportunities to drive sales growth in the Middle East and North Africa region. Egypt is the fourth largest economy in this region.
The transaction is expected to be completed by the end of October.
