Drug deal has promise for NZ

By DANIEL RIORDAN

Pharmaceutical giants Glaxo Wellcome and SmithKline Beecham have clinched their global merger after a year of delays, creating New Zealand's largest pharmaceutical company with annual sales of $100 million and about 135 staff.

The merger cost about half a dozen redundancies.

A separately managed healthcare company has also been created, with annual sales in New Zealand of about $40 million and 50 staff.

GlaxoSmithKline (GSK) listed on the London and New York Stock Exchanges yesterday after final regulatory approval for the merger between companies with combined revenue of $60 billion and profit of $18 billion.

The company estimates it has pharmaceutical market share worldwide of 7 per cent.

Its corporate head office will be in London but operational headquarters will be in two United States locations: Philadelphia and Research Triangle Park in North Carolina.

GSK's pharmaceutical managing director in New Zealand, former Glaxo Wellcome boss Peter Schweikert, said the merger offered more of the two companies' research and development spending for New Zealand.

Glaxo spent about $5.5 million here last year on research but SmithKline spent nothing.

He expected fierce bidding among the national subsidiaries for their share of the parent company's $9 billion annual research budget.

"There's a lot of good-quality research here."

Mr Schweikert said the Government's friendlier attitude to drug companies, and in particular its eagerness to have drug-funding agency Pharmac give greater consideration to research spending rather than just cost control in its decisions, boded well for the companies' research contribution to the new economy.

GSK Consumer Healthcare will be headed by SmithKline's Stephen Walker.

The merged firm's drugs include Ventolin and Flixotide for asthma, Zeffix for hepatitis B and Infanrix for childhood immunisation

Healthcare products include Panadol and Panadeine, Nicabate for smoking cessation, Macleans oral care products and Ribena and Lucozade nutritional drinks.