My colleague Vikas Dandekar, Pharmasianews bureau chief in India, recently tweeted the following comments from GSK CEO Andrew Witty (at an investor call).
“I’m not paying 37 times earnings for an Indian company, I am just not.”
“We are going to walk away from opportunities that go out of our price range, and where we don’t think we can drive value….”
“We’re not going to get drawn into the bidding frenzies.”
Witty can perhaps afford to be a bit choosy given the position of GSK’s Indian subsidiary. For years, Glaxo was number one in terms of market share in the country and only fell lower when in the wake of its integration with SmithKline Beecham in the early 2000s it consciously decided to chase profitability over market share and pedalled down on certain price-controlled products. Even now it continues to be in the top five (number four) by market share. Last fiscal GSK Pharma’s net sales grew 12 per cent. It has also demonstrated an ability to think out of the box – being one of the few Big Pharma subsidiaries that did India-specific product-licensing deals with the likes of Eisai, Organon and Astellas to bolster its offerings in the country. Also, there have been no major mega-deals (after the merger with SmithKline Beecham) to rock the boat. In terms of volumes, GSK India is already a significant contributor to the GSK stable.
Against this backdrop, Witty’s stance might be easier to comprehend.