GlaxoSmithKline (GSK) today signed an alliance with Dr Reddy’s Laboratories, an Indian generic drug maker, in its latest step towards building its business in emerging markets and copycat drugs.

The deal gives GSK access to Dr Reddy’s portfolio and future pipeline of more than 100 branded pharmaceuticals in areas including cardiovascular, diabetes and oncology. The first products are expected to reach the market in the second half of the year, with Mexico likely to be the first country.

The tie-up is chief executive, Andrew Witty’s latest move to expand in emerging markets and generic drugs, which can be sold as brands in poorer countries. The deal comes just six months after the drug giant signed an agreement with China’s Shenzhen Neptunus for flu vaccines and follows a collaboration with South Africa’s Aspen and last year’s purchase of Bristol-Myers Squibb’s mature business in Egypt.

Under the terms of the agreement, Dr Reddy’s will manufacture the medicines, which will then be licensed and supplied by GSK across Africa, the Middle East, Latin America and Asia. However, the agreement excludes India, which remains a priority market for Dr Reddy’s along with the US and Europe

“This is another significant step forward in our strategy to grow and diversify GSK’s business in emerging markets,” said Abbas Hussain, Glaxo’s president emerging markets. “Growth in both population and economic prosperity is leading to increased demand for branded pharmaceuticals.”

The agreement does not involve any upfront cash payment or equity stake.

Drug companies are increasingly looking to emerging markets for growth as sales in more developed territories slow down. Drug sales in emerging markets are expected to grow at a mid-teens percentage rate through 2013, against low single-digits for mature markets, according to IMS Health, a tracker of prescription drug data.

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