Focus on emerging markets

GSK snags Egyptian mature products business of Bristol-Myers Squibb for $210 million

Chris Anderson
LONDON—In a move that should provide a platform for marketing products in the Middle East and North Africa (MENA) markets, GlaxoSmithKline announced last week it reached agreement to acquire the mature products business of Bristol-Myers Squibb in Egypt for $210 million. The acquisition brings 20 branded products to GSK in four therapeutic areas, as well as a production facility in Giza, Egypt.

"This acquisition is an important step forward in GSK's strategy to accelerate sales growth in emerging markets. 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," says Abbas Hussain, president of GSK's Emerging Markets, in a prepared statement.

According to a company release, locking up the Bristol-Myers business will make GSK the leading drug marketer in Egypt with a market share of roughly 9 percent and place it in leading positions in the sale of such medications as antibiotics, ACE inhibitors, topical steroids and iron supplements.

The move to strengthen its hand in Egypt comes as no surprise to industry watchers, as GSK's CEO Andrew Witty, who took the helm of the operation in May, has realigned company business regions. This included adding an Asia Pacific region as well as an emerging markets region earlier this year, as the company looks to emphasize growth in these markets.

"Emerging markets, such as Brazil, Russia, India, China and the Middle East, are significant growth drivers of the future. They are already contributing close to 25 percent 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," said Witty in an April press release announcing the corporate changes.

The first move in this direction came in late July, when GSK cemented a licensing deal with South Africa-based Aspen Pharmacare, which provided the company with access to both a broad pipeline of future products as well as roughly 1,200 branded products which it will sell in emerging markets.

The agreement with Bristol-Myers gives GSK a leading position in the MENA market and in Egypt, where pharmaceutical sales grew by an estimated 19 percent last year—far outstripping the single-digit growth in mature markets around the world.

Sales of the acquired products last year were $48.1 million dollars. In all, GSK estimates the total pharmaceutical to be roughly $2.1 billion. DDN

Chris Anderson

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