GlaxoSmithKline extends presence in Asia via new alliance in South Korea with Dong-A; signs deal with bioMerieux

Further extending its reach into emerging markets, UK drugs giant GlaxoSmithKline has entered into a strategic alliance with Dong-A Pharmaceuticals, the number one pharmaceutical and over-the-counter medicines company in South Korea. As part of the transaction, GSK will acquire a 9.9% equity shareholding in Dong-A for £73.9 million ($108.5 million). Closing of the transaction is subject to fulfilment of certain conditions as agreed between GSK and Dong-A.

Dong-A has a portfolio of proprietary and generic pharmaceutical products and leading consumer health care brands. Last year, it reported total sales of £414 million, whereas. GSK's Korea business unit reported sales of some £225 million in 2009 and is ranked fifth in that market, the UK firm said.

The alliance will initially co-promote selected GSK and Dong-A pharmaceutical products for use in primary care. Additional synergies will be explored to strengthen both companies' commercial positions within the Korean pharmaceutical market, which is forecast to grow at 10% a year through 2012. Under the terms of the deal, the companies will share profits generated from the co-promoted products above pre-agreed baselines. A new business unit will be created within Dong-A to manage the collaboration.