GlaxoSmithKline sets up first team for acquisitions in 93 years

GlaxoSmithKline (GSK) Pharmaceuticals is scouting for acquisitions in the domestic market for the first time since it started its operations in the country 93 years ago.

The change in strategy comes at a time when the government’ increasing price control over branded generic medicines has affected its profitability.

In the last five years, the revenue of the UK-headquartered company recorded a compounded annual growth rate (CAGR) of a meagre 4.4 per cent to Rs 3,000 crore for 2016-17. Its profit declined to Rs 337 crore in 2016-17 from Rs 429 crore in 2011. The company changed its financial year to March-ending in 2014-15 from December-ending earlier.

Inclusion of the firm’s established products, such as Zinetac, in the National List of Essential Medicines (NELM) affected its profitability. The medicine, used for acid peptic ulcer therapy, de-grew 5 per cent in value despite its volume increasing by 36 per cent. It has a market share of 47 per cent in the category, according to a December 2016 data from IMS.
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