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

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LONDON—In a move that should provide a platform formarketing products in the Middle East and North Africa (MENA) markets, GlaxoSmithKlineannounced last week it reached agreement to acquire the mature productsbusiness of Bristol-Myers Squibb in Egypt for $210 million. The acquisitionbrings 20 branded products to GSK in four therapeutic areas, as well as aproduction facility in Giza, Egypt.

"This acquisition is an important step forward in GSK'sstrategy to accelerate sales growth in emerging markets. It will enable us tobuild and diversify our existing branded pharmaceuticals portfolio and signalsour strong commitment to provide quality medicines to patients in Egypt andother countries in the Middle East and North Africa region," says AbbasHussain, president of GSK's Emerging Markets in a prepared statement.

According to a company release, locking up the Bristol-Myersbusiness will make GSK the leading drug marketer in Egypt with a market shareof roughly 9 percent and place it in leading positions in the sale of suchmedications as antibiotics, ACE inhibitors, topical steroids and ironsupplements.

The move to strengthen its hand in Egypt comes as nosurprise to industry watchers, as GSK's CEO Andrew Witty, who took the helm ofthe operation in May, has realigned company business regions. This includedadding an Asia Pacific region as well as an emerging markets region earlierthis year, as the company looks to emphasize growth in these markets.

"Emerging markets, such as Brazil, Russia, India, China andthe Middle East, are significant growth drivers of the future. They are alreadycontributing close to 25 percent of today's market growth and are forecast togrow even faster in the future, around triple the rate of western countries. Itis essential that we have an operating structure that is dynamic and responsiveto the opportunities in these markets," said Witty in an April press releaseannouncing the corporate changes.

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

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

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

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