LONDON — Glaxo Wellcome and SmithKline Beecham completed their merger Wednesday to forge the world's leading drugs group by market share, nearly three years after the effort began.
The new company, Glaxo-SmithKline, with a market capitalization of about $168.7 billion, has a lot to prove after a long and painful birth. A series of product setbacks raised concern that it will struggle to match the growth rates of its top rivals.
The companies announced their merger plan Jan. 17 and had expected it to be completed by August. The date was pushed back twice because of scrutiny by the Federal Trade Commission, which was worried about market dominance in certain therapeutic areas in a consolidating industry.
The new group is a market leader in four of the five largest therapeutic categories in the pharmaceuticals industry: anti-infectives, central nervous system, respiratory and gastrointestinal and metabolic medicines.
With an annual research-and-development budget of $3.4 billion and more than 100,000 employees, the new company says it will be a powerful drug-discovery machine, exploiting the latest developments in genetics and other technologies.
But shareholders have been unsettled by a series of problems that have derailed a number of drugs.
In late November, Glaxo pulled Lotronex, a treatment for irritable bowel syndrome launched in the U.S. in March, from the market after reports of serious side effects. Lotronex had been seen as a $1-billion-a-year product.
That was followed this month by SmithKline abandoning tests on the experimental heart drug Lotrafiban and receiving a "non-approval" letter from the Food and Drug Administration for Factive, a promising new antibiotic.
Investors and analysts will be given an opportunity to look into the development pipeline and receive an update on new products--but not until February, industry sources said. That is when the new company plans an open day to brief the investment community on its research and development and business prospects.
Shares in the new company closed at $55.38, up $1.25, on the New York Stock Exchange.