Hyderabad: Dr. Reddy’s laboratories Ltd, the second largest drug making company in the country has terminated its tie up with Glaxo SmithKline Plc. (GSK), the British drug firm.
The ended alliance was meant for business in emerging markets outside India. The Indian drug making company plans to go ahead on its own, after ending the tie up with its British counterpart.
In its annual report filed on Friday, with US capital market regulator, Securities and Exchange Commission (SEC), the company stated, “As part of our company strategy and in light of our strong portfolio of products, we have decided to expand into select new markets,” as reported to live mint.
“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. To enable this, both the parties have agreed to terminate the old agreement,” Dr. Reddy’s added.
The deal had been entered with a view to develop and market select generic products and share revenues. In the first case emerging markets were to be tapped in countries like: Latin America, Africa, the Middle East and Asia-Pacific (excluding India) from fast-growing therapeutic segments such as cardiovascular, diabetes, oncology, gastroenterology and pain management.
In the field of revenue sharing- revenues were to be reported by GSK and shared with Dr. Reddy’s. Co-marketing of products had also been decided upon in certain markets. Dr. Reddy has not reported loss of revenue due to the termination.
According to analysts, falling apart of the deal does not come as a surprise, as priorities in the emerging markets keep changing.
“The deal was defunct for some time,” said Siddhant Khandekar, Associate Vice-President, Research, ICICI Securities Ltd.
Emerging markets contributed about 18% of Dr. Reddy’s global generic sales of Rs.12,806 crore in the year ended March.
On Friday, shares of Dr. Reddy’s dropped 0.64% to close atRs.3,150.30 on BSE, on a day the benchmark Sensex declined 2.24% to end at 26,397.71 points.