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GSK extends emerging markets business

Alistair Dawber
Tuesday 11 May 2010 19:00 EDT
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GlaxoSmithKline continued its march into the emerging markets by taking a 9.9 per cent in a South Korean drugs group yesterday. Europe's largest pharmaceuticals company said that it had entered into a strategic alliance with Dong-A Pharmaceuticals, paying £73.9m for its stake in the company.

The alliance will initially co-promote a number of GSK and Dong-A products for use in primary care. The two companies said that additional synergies will be explored to strengthen both companies' commercial positions within the Korean market. Under the deal, the companies will share profits generated from the co-promoted products.

"With Dong-A's market-leading position and expertise in Korea, this alliance presents a significant opportunity for GSK to extend its commercial footprint and build operational scale in this fast growing Asian market," said Christophe Weber of GSK's Asia-Pacific region.

The deal is typical of the kind of transaction favoured by GSK since Andrew Witty became chief executive two years ago. The group has cut spending on research and development and has switched its attention away from high-cost medicines in favour of activity in developing economies. In addition to yesterday's deal, GSK has similar deals in a number of countries, including South Africa.

Separately, maker of diagnostic tests Response Genetics signed a deal with GSK yesterday, giving the pharma giant the tests which assess gene mutilations.

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