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GSK sells penicillin facility to Dr Reddy’s

GlaxoSmithKline has sold its US oral penicillin facility and product portfolio to India’s Dr Reddy's Laboratories for an undisclosed sum

GlaxoSmithKline (GSK) has sold its US oral penicillin facility and product portfolio to India's Dr Reddy's Laboratories for an undisclosed sum. This sale is expected to close in the first half of 2011. 

The deal gives Dr Reddy's ownership of a penicillin manufacturing site in Bristol, Tennessee, as well as US rights for the antibiotics Augmentin and Amoxil, with GSK retaining rights outside the US. Both drugs are off-patent in the US and are available from other companies as lower-cost generics.

Amoxil (amoxicillin) is used to treat bacterial infections including pneumonia; bronchitis; gonorrhea; and infections of the ears, nose, throat, urinary tract, and skin. Augmentin combines amoxicillin with clavulanate potassium, which is used to overcome resistance in certain kinds of bacteria.

Divesting the assets "will allow GSK to focus resources on our newer portfolio of differentiated products," said Jean-Paul Reynaud, senior vice president, antibiotics and emerging markets supply at GSK. Just last month, the company signed a deal with Japanese drugmaker Shionogi & Co. to develop new antibiotics to fight multidrug-resistant bacteria.

For Dr Reddy's, which has a focus on generics, acquiring the assets "allows us to enter the United States penicillin-containing antibacterial market segment…in line with our strategy to significantly scale up our generics business in North America while providing an opportunity to explore additional synergy with our other businesses," said Abhijit Mukherjee, who leads the company's global generics business.

25th November 2010

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