Glaxo plans two deals as competition pushes prices up

GlaxoSmithKline Plc Chief Executive Officer Andrew Witty plans to announce two “small” acquisitions soon, after walking away from five potential purchases or partnerships since October. Recent financial-market turmoil hasn’t led to any “great bargains,” Witty said in an interview at the London office of Bloomberg News today. The executive, who has focused mostly on transactions of less than $1bn since taking the job two years ago, said prices are still being pushed up by competition. He declined to elaborate on the planned acquisitions. “We’ve done very few deals between October last year and the last couple of weeks because we saw a number of companies, but we couldn’t get to a price that made sense for our shareholders,” Witty said. “I’m not going to overpay for these companies. We’ve walked away from five.” The company is working on “one or two others that you’ll hear about soon enough.” Witty’s comments underscore the competition for new treatments as drugmakers try to replace revenue lost to generic medicines. Pharmaceutical companies have announced $42.3bn of takeovers this year. The value of acquisitions declined from $132.2bn in the same period last year, when two of the industry’s biggest deals - Pfizer Inc’s acquisition of Wyeth and Merck & Co’s purchase of Schering Plough Corp- were announced.