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GSK enters alliance with Dong-A

GlaxoSmithKline has entered a 'strategic alliance' with leading South Korean company, Dong-A Pharmaceuticals

GlaxoSmithKline (GSK) has entered a 'strategic alliance' with leading South Korean company, Dong-A Pharmaceuticals, with a view to extending its Asian presence.

US-based pharma giants, GSK, will acquire a 9.9 per cent minority equity shareholding in Dong-A for £73.9m. The Korean company reported total sales of £414m for 2009.

The pharmaceutical market in South Korea was the 13th largest in the world in 2008 and saw double-digit growth for the period 2006 to 2008.

Christophe Weber, senior vice president and regional director of Asia Pacific, GSK, commented on the deal: "With Dong-A's market-leading position and expertise in Korea, this alliance presents a significant opportunity for GSK to extend its commercial footprint and build operational scale in this fast growing Asian market."

GSK Korea, the company's current effort in South Korea, had sales of £225m for 2009, and is the fifth largest pharmaceutical company in the country.

The deal will see the two companies co-promote selected products for use in primary care. Dong-A has a portfolio of proprietary and generic pharmaceutical products and leading consumer healthcare brands, including domestic blockbusters Stillen (eupatilin), for gastritis treatment, and Zydena (udenafil) for erectile dysfunction.

The companies will share profits generated from the co-promoted products, with a new business unit created within Dong-A to manage the collaboration.

Won-Bae Kim, president of Dong-A said: "This collaboration is expected to improve our market competitiveness in the fast changing domestic and global pharmaceutical markets. It will enable us to accelerate our transformation into a true global player taking advantage of GSK's excellent product pipeline as well as their global marketing/ operational expertise and standards."

Closing of the transaction is subject to certain agreed conditions.

11th May 2010

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