Glaxo plants a flag in Singapore with CEO Witty on hand

GSK CEO Andrew Witty

SINGAPORE--GlaxoSmithKline ($GSK) planted its flag in Singapore to build on a close relationship with the government of the wealthy city-state where CEO Andrew Witty worked and lived earlier in his career with the U.K. drugmaker.

The move also follows two damaging years in China linked to a 2013 bribery scandal that rippled in the past week with the firing of more than 100 employees in the country linked to compliance breaches. Last year in October, Witty shuffled key lieutenant and Singapore-based Abbas Hussain to the post of president at Global Pharmaceuticals.

Hussain has a key role now in reviving sales fortunes in the U.S., but also continues to oversee Asia business decisions mainly out of London.

The company's Asia pharmaceutical, consumer healthcare and vaccine businesses will be housed by 2016 in an 8-story, nearly 15,000-square-meter facility near a biotech cluster called Biopolis a stone's throw away from the National University of Singapore and its hospital and clinical complex.

Witty said the company remains focused on Asia despite the China scandal.

"While we expect it to be a bit slower going forward than it was 5 years ago, we still think it's going to be a very vibrant growth area," Witty told reporters. Witty has made emerging markets a priority for GSK since taking over in 2008.

Last year, the drugmaker was fined 3 billion yuan ($479 million) in China following allegations in 2013 it funneled funds to travel agencies to facilitate bribes to doctors and officials. The high-profile case hit GSK's drug sales in the country.

The company is dismissing 110 employees in China for misconduct, people familiar with the matter said this month.

"I don't have an expectation that there will be more people leaving, but equally if we found somebody else who did something wrong then they would go through the process and whatever would happen would happen," Witty said.

The move is a further coup for Singapore's Economic Development Board which in the past two years has landed state-of-the-art manufacturing operations from AbbVie ($ABBV), Amgen ($AMGN), Novartis ($NVS) and GSK as well as regional headquarters for firms such as Mundipharma, placing it as a key business, distribution and manufacturing center for drugs and medical devices.

The hub status is particularly notable as the Association of Southeast Asian Nations heads into a combined economic pact at the end of 2015 that will see greater harmonization on product approvals.

GSK has signed an agreement with Boustead Development Partnership joint venture entity to develop and lease the new building. "GSK and Singapore's histories are entwined," Witty said in a release.

"Since building our first site at Quality Road in 1972, we have continued to significantly expand our footprint, capability and talent base. In our experience and my own personal experience, Singapore excels in fostering talent, supporting business growth and offers an excellent base to access Asia. This is why we are making a significant decision to further increase our presence in Singapore as we continue to modernize and advance GSK."

- here's the release from GSK