Expect more megamergers, GSK exec says

Look for more M&A in pharma, GlaxoSmithKline's ($GSK) chief strategy officer says. And not only mergers and buyouts, but megamergers. At Reuters Health Summit, GSK's David Redfern predicted that patent-cliff pressures--and a slowdown of growth in Western markets--will force more pharma companies to join together. "There will probably be more mega-deals," Redfern said. "As pressure increases, you'll probably see more deals."

Count GSK out of any future megamergers, however. Redfern says that his company will stick to its small-deal approach, because it doesn't have the same sort of gaps in its product pipeline as other Big Pharmas do. Given that other drugmakers are also eyeing smaller targets, Redferm expects the market for medium-sized pharma buys to heat up.

GSK is also sticking to its strategy of growing in emerging markets, but it will be looking beyond the big countries--Brazil, Russia, India and China--for future deals. Acquisitions in these "BRIC" countries are getting too competitive. "Prices are being driven up," Redfern says. "We are extremely rational in what we pay."

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