Dr Reddy’s buys GSK’s oral penicillin facility in US

24 Nov 2010 Evaluate

Dr Reddy’s Laboratories has bought GlaxoSmithKline’s oral penicillin facility and products in the US for an undisclosed sum. The transaction is expected to close within the first half of calendar year 2011.As per the agreement; GSK will transfer ownership of its penicillin manufacturing site in Bristol, Tennessee, and rights for the Augmentin and Amoxil brands in the US to DRL. The rights for the non-US markets will, however, remain with GSK. 

This acquisition allows DRL to enter the US penicillin-containing antibacterial market segment and serve the needs of its customers. This is in line with company’s strategy to significantly scale up our generics business in North America, while providing an opportunity to explore additional synergy with our other businesses.

According to IMS data, Augmentin and Amoxil brands contributed revenues of around $73 million to GSK in FY09. However, DRL is unlikely to garner such sales from these brands in future due to strong competition from other generics in the segment. The entire segment clocked sales to the tune of around $750 million for 12 months to August, 2010. crackcrack

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