Proving once again that emerging markets are where it's at, GlaxoSmithKline (NYSE: GSK) has inked a strategic alliance in South Korea. The British company will buy a 9.9 percent stake in Dong-A Pharmaceuticals--which happens to be the No. 1 pharma and OTC drugmaker in that country--and the two companies will co-promote a slate of GSK and Dong-A primary-care products.
GSK currently is ranked fifth in the South Korean market with 2009 sales of 225 million pounds ($333.6 million). But it wants a bigger share, considering that Korea's pharma market has been growing at a double-digit clip. From 2006 to 2008, the country's drug sales grew at a 13.9 percent annual rate, and IMS Health expects continued growth of some 10 percent per year through 2012, GSK says.
"With Dong-A's market-leading position and expertise in Korea, this alliance presents a significant opportunity for GSK to extend its commercial footprint and build operational scale in this fast-growing Asian market," SVP and Asia Pacific director Christophe Weber says in a statement. The two companies will share profits from the co-promoted products, and will look for other opportunities to work together in South Korea.
Reuters notes that the Dong-A arrangement is similar to GSK's relatively new alliance with South Africa's Aspen Pharmacare. And the South Korean deal is just one of a series of emerging-markets alliances and partnerships for GSK as the company works to expand its presence in the developing world, where drug sales are growing faster than they are in such mature markets as the U.S. and Europe.