Glaxo UK to outsource aerosols to Cipla?

GlaxoSmithkline Pharma may strike a sourcing deal with Cipla for inhalation devices. It is learnt that the two companies are holding discussions that may benefit both, reports CNBC-TV18.

It looks like tradtional rivals GlaxoSmithkline Pharma and Cipla are forging a closer bonding. GlaxoSmithkline is believed to be in discussions to source inhlation devices from Cipla for Asia.

And though Cipla chose not to comment, Glaxo officials maintained that the news is speculative but the company works with partners keeping in mind specific local manufacturing advantages.

Analysts say the sourcing deal works well for both the companies. While GlaxoSmithkline has a clear dominance over the world market for respiratory products, Cipla has been making a steady headway in devices such as aerosols.

Interestingly, while Cipla ranks as the top drugmaker in the domestic market, GlaxoSmithkline ranks third with an almost similar product basket as that of Cipla.
 
The two companies compete in various segments including respiratory drugs, anti-infectives, anti-aids drugs and drugs for chronic diseases such as diabetes and vardiovascular ailments.
 
Cipla is known globally for its inhalation products manufactured at cheap costs and Glaxo's compulsions to cut costs for its own products may get the two rivals work closely.

Cipla is in preliminary talks with Reliance Retail for outsourcing the products.

When approached, Cipla refused to comment and Glaxo UK said the news is speculative.

Disclaimer: This information is source-based and has not been provided to the stock exchanges.