The weak world economy has not prevented pharmaceuticals major GlaxoSmithKline from pursuing its plans to acquire some key patents. With an eye on emerging markets, the company is buying several products from Belgium's UCB. For a reported price of 515.0 million euros ($667.2 million), Glaxo is acquiring the rights to UCB's allergy medicines Xyzal and Zyrtec, and its epilepsy drug Keppra.
The deal for a chunk of Belgium-based UCB's portfolio is worth 512 million. However, GSK is keeping its hands off some of UCB's recent offerings, such as Cimza, designed to treat Crone's disease.
While Glaxo is buying UCB's operations and commercial rights in 50 countries, it is avoiding the BRIC (Brazil, Russia, India, China) markets, which in these depressed times are the focus of most international conglomerates. Glaxo already has a marked presence in these regions, especially in India, where it is a major pharma company.
Recently Glaxo has recently made a number of forays into emerging markets, including a deal with Bristo-Myers Squibb's operations in Pakistan last month.
So far, earnings within the pharmaceutical sector have been holding out despite the recession. But falling government spending on healthcare is bound to have a negative impact.
Glaxo's results have been hit by increasing competition and pricing pressure in developed markets. In October the firm announced that earnings for the third quarter fell 9.0 per cent in inflation-adjusted terms.