Drugs multinational also signs €1.5bn deal to sell pneumonia and meningitis vaccines in Brazil.
Drug multinational GlaxoSmithKline took further steps to build its presence in emerging markets today as it announced the launch of Lucozade in China. The company said it hoped the rollout of the energy drink in the world's most populous country would be followed by other markets such as Mexico, Brazil and the US.
It was also disclosed today that Glaxo signed a €1.5bn (£1.38bn) deal to sell its pneumonia and meningitis vaccines in Brazil, futher increasing its world reach.
Lucozade, which brings in about £400m sales, is predominantly sold in Britain, Ireland, and Hong Kong. The company said it had signed a deal with President (Shanghai) Trading to sell the drink in China, with the launch planned for early 2010.
John Clarke, president of consumer healthcare for Glaxo, said: "GSK is focused on building a diverse global healthcare business, and this agreement marks the first in a series of steps we are taking to expand our successful nutritional healthcare business into new and emerging markets."
Glaxo has been looking to diversify into new product areas and markets to buffer itself from the effects of falling demand and expiry of patents for its drugs in the US – the biggest market for pharmaceuticals in the world. It had identified sales of vaccines in emerging markets as one of its highest growth areas, and the deal with Brazil is the first of its kind in terms of longevity.
It will see Glaxo sell its Synflorix pneumococcal vaccine over 10 years to the Brazilian government for €11.50 per treatment (it costs more than €30 in Europe). After that, Glaxo will transfer the technology to government-owned foundation Fiocruz.
"What we're seeing out of Glaxo is the willingness to do more deals in more territories to expand distribution and increase revenues, and in particular in emerging markets," Damian McNeela, an analyst at brokerage Panmure Gordon, said.
A spokesperson said Glaxo would be exploring similar deals in other emerging markets as it looks to diversify. It is already the biggest seller of vaccines in Brazil with a 42% market share. Brazil is predominantly a public system with approximately 75% of the population relying on the government for healthcare, the company said.
Copyright Speakers Corner 2016