Glaxo set for big push into emerging markets

GlaxoSmithKline's new chief executive signalled his intent to launch an expansion drive into the emerging markets yesterday as he revealed his strategic objectives for the first time and announced a "transformational" partnership with a South African drugs company.

Andrew Witty, who took over from Jean-Pierre Garnier at the end of May, also admitted that the pharmaceuticals industry faced a "challenging" future as companies are set to lose billions from expired patents and the costs of research and development continue to soar. He issued a rallying cry that the industry should "seize the initiative".

Glaxo has signed a licensing and supply agreement with Aspen, a South African pharmaceuticals group, and its joint venture partner Strides Arcolab – a deal it described as "a transformational agreement to significantly extend its pharmaceutical portfolio in emerging markets".

The group added: "This signals a significant new strategy from GlaxoSmithKline to accelerate sales growth in emerging markets." Emerging markets are forecast to grow by three times the rate of the West, and will account for 40 per cent of growth in global pharmaceutical market by 2020, Glaxo added.

One of Mr Witty's first moves as chief executive was to create a new emerging markets division and appoint Abbas Hussain as president last month.

The group added it had already prioritised investments in the regions and had bulked up its regulatory expertise as a result. Speaking on the day of his first quarterly results presentation, Mr Witty said the announcement demonstrated the company's focus "where growth in both population and economic prosperity is leading to increased demand for branded pharmaceuticals".

Mr Witty also laid out his strategic priorities for Glaxo's business to investors yesterday. He plans to simplify the group's operating structure, diversify the business and put more emphasis on "products of value".

He said: "In the next few years the pharmaceutical industry will face immense challenges as an unprecedented number of products lose patent protection. This will be set against a backdrop of payers searching for ever more cost-effective healthcare and escalating patient demand for new and better medicines."

One analyst said companies would lose $200bn (£100bn) from patent expiry over the next five years and only half of that would be replaced by drugs coming through the current clinical pipeline. Mr Witty said the future of healthcare was "challenging" but held "significant opportunity".

The group is set to target growing areas including vaccines and consumer healthcare products as well as new growth areas such as biopharmaceuticals. "These businesses offer significant growth opportunities to GlaxoSmithKline through new products and geographic expansion," Mr Witty said.

James Millett, an analyst at Cazenove, said: "The strategic review from the new chief executive should give some comfort to GlaxoSmithKline investors." However, he added that there was a "lack of well-defined targets being disclosed".

Glaxo yesterday beat analyst expectations as it announced that turnover in the second quarter was up 4 per cent to £5.8bn driven by stronger performance in the vaccines division.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Buttoned up: Ryan Reynolds with Helen Mirren in ‘Woman in Gold’
filmFor every box-office smash in his Hollywood career, there's always been a misconceived let-down. Now he says it's time for a reboot
News
people
News
Actress Julianne Moore wins the Best Actress in a Leading Role Award for 'Still Alice' during the 87th Annual Academy Awards in Hollywood, California
people
Sport
Ross Barkley
footballPaul Scholes says it's time for the Everton playmaker to step up and seize the England No 10 shirt
News
'We will fix it': mice in the 1970s children’s programme Bagpuss
science
Life and Style
2 Karl Lagerfeld and Choupette
fashion
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Recruitment Genius: Telesales Executive - OTE £32,000+

£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Day In a Page

War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

War with Isis

Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
Scientists develop mechanical spring-loaded leg brace to improve walking

A spring in your step?

Scientists develop mechanical leg brace to help take a load off
Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

Peter Ackroyd on Alfred Hitchcock

Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

Ryan Reynolds branches out in Woman in Gold

For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
Why Robin Williams safeguarded himself against a morbid trend in advertising

Stars safeguard against morbid advertising

As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

UK horticulture industry facing skills crisis

Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
Hack Circus aims to turn the rule-abiding approach of TED talks on its head

Hack Circus: Technology, art and learning

Hack Circus aims to turn the rule-abiding approach of TED talks on its head. Rhodri Marsden meets mistress of ceremonies Leila Johnston
Sevenoaks is split over much-delayed decision on controversial grammar school annexe

Sevenoaks split over grammar school annexe

If Weald of Kent Grammar School is given the go-ahead for an annexe in leafy Sevenoaks, it will be the first selective state school to open in 50 years
10 best compact cameras

A look through the lens: 10 best compact cameras

If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
Paul Scholes column: Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now

Paul Scholes column

Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now
Why Michael Carrick is still proving an enigma for England

Why Carrick is still proving an enigma for England

Manchester United's talented midfielder has played international football for almost 14 years yet, frustratingly, has won only 32 caps, says Sam Wallace
Tracey Neville: The netball coach who is just as busy as her brothers, Gary and Phil

Tracey Neville is just as busy as her brothers, Gary and Phil

The former player on how she is finding time to coach both Manchester Thunder in the Superleague and England in this year's World Cup
General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?