Bangalore, Mar 10, 2010: The acquisition plans of GlaxoSmithKline (GSK) have been doing the rounds for quite some time now. It all started with talks on the buyout of Piramal Healthcare followed by acquisition of major shares of Hyderabad-based Shantha Biotechnics (The company was later taken over by Sanofi Pasteur), and then the latest being acquisition of Dr. Reddy's Labs.
GSK's CEO, Mr Andrew Witty's statement at a recent press conference in India could perhaps accelerate these speculations. Without pinpointing to any specific name, Mr Witty revealed that he is on the hunt for either acquiring companies or striking licensing alliances with their Indian counterparts. Speaking to a group of journalists at GSK's new albendazole manufacturing production facility at Nasik, Mr Witty revealed, “Our strategy for growth in India is either through partnerships, expansion through our own capabilities or through acquisitions. But to consolidate our position here, we are open to acquisition which fits our agenda. However, as far as acquisitions are concerned we are taking more precaution. The real challenge in India is that companies come out with unrealistic valuations.” He, however, revealed that he would prefer alliances over acquisitions, “Unlike acquisitions, for alliances you do not have to pump in much capital,” he added.
Witty, who had assumed the reins of the company back in 2008, had specifically flown down to Nasik in order to dedicate the new albendazole manufacturing production facility, to the WHO's Global Program to Eliminate Lymphatic Filariasis (LF). This new facility, built with an investment of $0.32 million, will deliver an additional 300 million treatments of albendazole per year. The new Nasik facility will double GSK’s annual manufacturing capacity for the LF program. The technology for this plant was transferred from Cape Town and production started in August 2009. The first consignment of 15 million albendazole tablets was supplied to WHO on December 23, 2009. This year, Nasik is expected to deliver 300 million tablets
Lymphatic Filariasis, often called elephantiasis, is a parasitic infection spread by mosquitoes that causes grotesque, painful swelling of the limbs, breasts, and genitals. Considered a neglected tropical disease, LF almost exclusively affects the world’s poorest people. Approximately one-fifth of the world’s population (1.3 billion people) is at the risk of contracting LF and approximately 120 million people in 83 countries are currently infected.
“The new plant produces about one-eighth of GSKs medicines across the world. And will be an important facility in our agenda to eliminate LF by 2020. We have been working towards the common goal of eliminating LF with our partners in the Global Alliance for over a decade. This program has demonstrated the power of partnership in the elimination of diseases of the developing world,” said Mr Witty. This facility will also go through a major revamp over the next two years with an investment of up to $13.19 million, announced GSK India MD, Dr Hasit Joshipura at a recent analyst meet.
GSK India has been a major success story for the company, Witty declared.”India today holds an important position for our overall strategy. We are moving towards emerging nations like India and China and our vaccine portfolio will be a crucial part of growth story here.”
Apart from LF, malaria will also be another area of focus for the company. “We are looking at malaria. We had taken around two million chemical components and after screening them have identified 30,000 possibilities of a cure,” revealed Mr Witty.
This apart the company has devised a plan for the least developed countries (LDC) which includes a slash of prices of its patented drugs of almost up to 75 percent, coming up with the concept of a patent pool which will invite discoverers to develop on new medicines and reinvesting around 20 percent of their profits on infrastructure development in LDCs.
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