Dr Reddy's buys Glaxo's US penicillin business
Dr Reddy's Laboratories (DRL), the country's second-biggest drug maker by sales, has bought GlaxoSmithKline's (GSK) oral penicillin facility and products in United States for an undisclosed sum.business Updated: Nov 25, 2010 02:23 IST
Dr Reddy's Laboratories (DRL), the country's second-biggest drug maker by sales, has bought GlaxoSmithKline's (GSK) oral penicillin facility and products in United States for an undisclosed sum.
Financial terms of the deal, which is expected to close in the first half of 2011, were not disclosed.
"It (the acquisition) allows us to enter the US penicillin-containing antibacterial market segment and serve the needs of our customers," said Abhijit Mukherjee, president (global generics business), DRL in a statement to Bombay Stock Exchange.
"This is in line with our strategy to significantly scale up our generics business in North America, while providing an opportunity to explore additional synergy with our other businesses," Mukherjee said.
As per the agreement, GSK will transfer ownership of its penicillin manufacturing site in Bristol, Tennessee, and rights for the Augmentin and Amoxil brands in the US to DRL. The rights for the non-US markets will, however, remain with GSK.
"The sale of this site and divestiture of these products in the UnitedStates are a positive step forward for this manufacturing facility. The Bristol site has had a long and successful history with GSK," said Jean-Paul Reynaud, senior vice-president (antibiotics and emerging markets supply), GSK.
"This sale will enable the facility to continue to provide oral penicillin-containing antibacterial products to meet the needs of patients in the United States, and will allow GSK to focus resources on our newer portfolio of differentiated products," added Reynaud.
Just last year, DRL had entered into a strategic marketing partnership with GSK to pursue opportunities in emerging markets.
Shares of DRL closed up. Shares of DRL closed at Rs 1785 on Bombay Stock Exchange, up by around 1 %, which is a new high for the scrip. Right prescription for Dr Reddy's