GSK to sell penicillin factory to Dr Reddy’s

By Alexandria Pešić

- Last updated on GMT

Related tags Dr reddy Glaxosmithkline

GlaxoSmithKline will sell its oral penicillin manufacturing facility in Tennessee, US, to Dr Reddy’s for an undisclosed sum, along with US rights to its Augmentin and Amoxin brands.

Indian generics maker, Dr Reddy’s Laboratories said the acquisition fits well with current plans to bolster its presence in North America while providing further opportunities for future collaborations with other drugmakers.

The acquisition “allows us to enter the US penicillin-containing antibacterial market segment and serve the needs of our customers and patients through manufacturing capabilities that did not previously exist within Dr Reddy’s,” ​said Abhijit Mukherjee, president of global generic business at Dr Reddy’s.

The penicillin manufacturing site currently employs 46 people, according GSK, which believes Dr Reddy’s will maintain the workers who are already established at the unit, along with other applicants once it takes over.

GSK is selling US rights to its Augmentin and Amoxil brands, whose respective market shares have declined due to generic competition pressure. The UK drug major said its time and money will now be focused on developing other products.

According to IMS data, GSK’s Augmentin and Amoxil brands generated revenues of $73m in 2009, but the drug database firm said Dr Reddy’s is unlikely to see similar sales as a result of strong competition from generics.

In a GSK statement, senior vice president, Jean-Paul Reynaud said: “This sale will enable the facility to provide oral-penicillin- containing antibacterial products and will allow GSK to focus on our newer portfolio of differentiated products.”

GSK will however, retain the rights to sell Augmentin and Amoxin outside the US, and may still market the products as branded generics in emerging markets, said the firm.

Partnership to break through Indian market

The sale is a mirror image of the marketing deal GSK signed with Dr Reddy’s in June last year that was designed to help the UK major pursue opportunities in ‘pharmerging’ markets.

Under that agreement, GSK gained access to products in Dr Reddy’s portfolio of 100 branded therapeutics for the treatment of cardiovascular disease, diabetes, oncology, gastroenterology and pain management.

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