GSK enters transformational agreement with Aspen to drive growth in emerging markets
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GlaxoSmithKline (GSK) today announced a transformational agreement to significantly extend its pharmaceutical portfolio in emerging markets. The licensing collaboration between GSK and South African based pharmaceuticals company, Aspen, and its joint venture partner, Strides Arcolab Ltd (Strides), signals a significant new strategy from GSK to accelerate sales growth in emerging markets.
Emerging markets are forecast to grow by 13% - triple traditional Western markets - and will account for 40% of growth in the worldwide pharmaceutical market by 2020. GSK is actively seeking to unlock the potential of emerging markets and has already established a new business model within GSK, and prioritised investments in capacity and regulatory expertise to strengthen GSK’s existing strong geographical footprint in emerging market countries.
Commenting on the collaboration Andrew Witty, Chief Executive Officer of GSK, said: “Today’s announcement demonstrates our intention to catalyse GSK’s sales growth in emerging markets where growth in both population and economic prosperity is leading to increased demand for branded pharmaceuticals.
“This collaboration gives us access to a renewable, high quality and competitively priced source of branded pharmaceuticals in high demand therapeutic areas. Aspen, through its own pipeline and that of its joint venture with Strides has a product portfolio of over 450 molecules and 1200 products which complements our own product portfolio and will enable us to deliver more medicines of value to more patients in these countries.”
Under the terms of the collaboration GSK gains access to a broad and diverse portfolio and future pipeline of branded pharmaceuticals on a license and supply basis in countries across emerging markets. Products will be competitively sourced by GSK through access to low-cost manufacturing from Aspen and its partners.
GSK will register the products in markets where they haven’t already been approved as well as assuming responsibility for distribution and commercialisation, and expects to be able to commercialise the first group of products selected from 2010 onwards. Aspen will continue to market these products in Sub-Saharan Africa and other countries. GSK will make limited up-front payments to Aspen to cover any additional regulatory work required to file the initially selected products in the appropriate countries. The majority of payments from GSK to Aspen will be made via a profit-sharing arrangement based on actual sales.
GlaxoSmithKline – one of the world’s leading research-based pharmaceutical and healthcare companies – is committed to improving the quality of human life by enabling people to do more, feel better and live longer.
Cautionary statement regarding forward-looking statements
Under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, GSK cautions investors that any forward-looking statements or projections made by GSK, including those made in this announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Factors that may affect GSK’ s operations are described under ’Risk Factors’ in the ’Business Review’ in the company’ s Annual Report on Form 20-F for 2007.
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