GSK buys Argentine drugmaker

The latest in a string of deals in developing markets gives Glaxo a portfolio of branded generics covering therapeutic areas such as cardiovascular, gastroenterology, metabolic and urology.

Phoenix also brings Glaxo a factory near Buenos Aires, a primary care sales force and pipeline of additional branded generic medicines.

Emerging markets are the new battleground for the world’s top drugmakers as sales stall in Western markets – and Glaxo has vowed to increase its business, partly by moving into the sale of off-patent branded medicines.

Phoenix had sales last year of around £70m ($102m), ranking it number eight in Argentina’s pharmaceutical market, while Glaxo’s Argentine business had revenue of £100m. Combined, GSK Argentina and Phoenix would rank third in the Argentine market.

“This is an important step forward in our strategy to grow our business in Latin America – a key group of emerging markets for GSK,” said Abbas Hussain, the company’s head of emerging markets.

Following the acquisition, GSK Argentina and Phoenix will remain separate legal entities.

In May, Glaxo agreed to buy a 9.9 percent stake in South Korean group Dong-A Pharmaceuticals for £73.9m, the latest of a string of deals designed to increase its share in up-and-coming markets worldwide.

Other deals have included the acquisition of branded generics from both Bristol-Myers Squibb and UCB, as well as product development and distribution deals with Dr Reddy’s of India and South Africa’s Aspen Pharmacare, it which it also has an equity stake.

The balance of the pharmaceutical market is expected to shift significantly toward emerging markets in the next five years.

IMS Health, a leading provider of prescription drug data, forecasts drug sales growth in leading emerging markets will average 14-17 percent annually, while major developed markets grow three to six percent.

Argentina is the eighth largest of the emerging markets for drugs, with a total market value of $3bn and the third highest growth rate at 22 percent, according to IMS.