Glaxo ramps up emerging markets push with South Korean acquisition

DRUGS giant GlaxoSmithKline yesterday ramped up its efforts to break into the emerging markets, as it agreed to buy a 9.9 per cent stake in South Korea’s Dong-A Pharmaceuticals for £73.9m.

The deal wins the British-based group an alliance with the leading pharmaceuticals and over-the-counter medicines company in South Korea – a market expected to grow around 10 per cent a year through 2012.

Emerging markets have become the new battleground for the world’s top drugmakers as sales increasingly stall in western markets.

Glaxo chief executive Andrew Witty has already signed a string of deals to increase his company’s footprint in key emerging markets, including taking a similar minority holding in South Africa’s Aspen Pharmacare.

Christophe Weber, Glaxo’s regional director of Asia Pacific, said: “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.”

The new alliance will initially co-promote selected Glaxo and Dong-A drugs for use in primary care, but the companies said that additional synergies would be explored.

Glaxo and Dong-A, which had sales last year of £414m, will share profit from the co-promoted products above pre-agreed baselines. A new business unit will be created within Dong-A to manage the collaboration.