GSK exits U.S. penicillin market with Dr. Reddy's deal

GlaxoSmithKline is selling off its penicillin-manufacturing facility in Bristol, TN to the Indian generics maker Dr. Reddy's Laboratories.

GlaxoSmithKline ($GSK) says so long to penicillin in the U.S. The drugmaker is selling off its penicillin-manufacturing facility in Bristol, TN, along with the U.S. rights to branded penicillin meds Augmentin and Amoxil, to the Indian generics maker Dr. Reddy's Laboratories ($RDY). The terms of the deal weren't disclosed.

Both Augmentin and Amoxil have generic rivals in the U.S., so they're not big sellers for GSK. The would prefer to spend its time and money on other projects, SVP Jean-Paul Reynaud said in a statement. "This sale will enable the facility to provide oral penicillin-containing antibacterial products...and will allow GSK to focus resources on our newer portfolio of differentiated products," Reynaud said. GSK will keep the rights to sell Augmentin and Amoxil outside the U.S.--for instance, in emerging markets where GSK could market them as branded generics.

For Dr. Reddy's, the purchase is a chance to get into penicillin meds in the U.S. Plus, the p