Indian pharma major Dr Reddy's Laboratories has acquired the United States oral penicillin facility and product portfolio of GlaxoSmithKline plc. This will mark the exit of GSK from the oral penicillin business in the US. The value of the transaction, which is targeted to close within the first half of the calendar year 2011, has not been disclosed.

Both drugs are now subject to generic competition and consequently generate only minor sales for Glaxo, according to Reuters.

Under the agreement, GSK will transfer ownership of its penicillin manufacturing site in Bristol, Tennessee, US, and rights for the Augmentin and Amoxil brands in the US to Dr. Reddy’s. GSK will retain the existing rights for these brands outside the US.

Abhijit Mukherjee, President– Global Generics Business, Dr. Reddy's Laboratories, said, “We are excited about this acquisition, as it allows us to enter the US penicillin-containing antibacterial market segment and serve the needs of our customers and patients through manufacturing capabilities that did not previously exist within Dr. Reddy’s. This acquisition is in line with our strategy to significantly scale up our generics business in North America while providing an opportunity to explore additional synergy with our other businesses.”

“The sale of this site and divestiture of these products in the United States are a positive step forward for this manufacturing facility.  The Bristol site has had a long and successful history with GSK. This sale will enable the facility to continue to provide oral penicillin-containing antibacterial products to meet the needs of patients in the United States, and will allow GSK to focus resources on our newer portfolio of differentiated products,” said Jean-Paul Reynaud, Senior Vice President, Antibiotics and Emerging Markets Supply.

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