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GSK increases China presence

GlaxoSmithKline is to purchase Chinese company Nanjing MeiRui Pharmaceuticals, expanding its presence in emerging markets

GlaxoSmithKline (GSK) is to purchase Chinese company Nanjing MeiRui Pharmaceuticals, expanding its presence in emerging markets.

GSK will pay around $70m for MeiRui, the operating entity of Pagoda Pharma Group in China, with ninety per cent of share capital to be acquired from Pagoda Pharmaceuticals Limited and ten per cent from Allergon AB.

The transaction is expected by the end of 2010, subject to regulatory approval.

GSK will take over a manufacturing facility in Nanjing City, Jiangsu Province, China, and will gain access to an established marketing platform and a strong company portfolio of urology and allergy products.

This includes Prostat for benign prostatic hyperplasia, as well as Sheniting for overactive bladder syndrome.

GSK's decision to further expand in China ties in with plans announced at the beginning of 2010 to shift focus from traditional Western markets to emerging markets in Asia and Latin America.

The company's third quarter results also saw revenue in emerging markets, including China, increase by 14 per cent as pharmaceutical sales in both the US and Europe decreased.

In recent months, other major pharmaceutical companies have also declared expansion projects in China.

Nycomed acquired a majority stake in Guangdong Techpool Bio-Pharma Co (Techpool), a Chinese bio-pharmaceutical company, while Novo Nordisk announced plans to double the size of its R&D centre in Beijing by 2015.

Eli Lilly and Company also announced developments in China, with intentions to open a research centre in the country focused on the discovery of new medicines to treat diabetes.

7th December 2010

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