Dr. Reddy's breaks off marketing partnership with Glaxo
- Indian drugmaker Dr. Reddy's will terminate a development and marketing partnership with GlaxoSmithKline, as it looks to expand into several emerging markets on its own, the company said in a filing with the Securities and Exchange Commission.
- The two companies had teamed up in 2009 to sell certain generic drugs made by Dr. Reddy's in emerging markets outside India.
- According to the filing, Dr. Reddy's decided to terminate the partnership in order to support its own entry into those markets.
Under the partnership, Dr. Reddy's had licensed and supplied the drugs to GlaxoSmithKline, which then sold the drugs in markets across Latin America, Africa, the Middle East, and Asia-Pacific.
The deal was structured to share revenue between Dr. Reddy's and Glaxo, according to Livemint.
Similar to much of India's pharmaceutical industry, Dr. Reddy's has a strong presence in generics. Recently, the company snapped up eight generic drugs from Teva in a $350 million deal, as the Israeli company divests assets to win approval for its $41 billion deal for Allergan's generics business.
The termination of the deal with Glaxo seems to foreshadow a more active expansion into emerging markets on the part of Dr. Reddy's.
"As part of our company strategy and in light of our strong portfolio of products, we have decided to expand into select new markets. To supplement our own entry and growth in these markets, we have reached an agreement with GSK to take back the marketing rights for key products in these markets," the company said in its filing.
The termination of the deal may also reflect Glaxo's own presence in emerging markets. Last year, Glaxo earned roughly 36% of its pharmaceuticals revenue in international markets outside the U.S. and Europe.