AstraZeneca Is Scaling Up Operations in South African Market, Brennan Says

AstraZeneca Plc, the U.K.’s second- largest drugmaker, is scaling up its up its operations in South Africa, where sales are growing faster than in more established markets, Chief Executive Officer David Brennan said.

“We have been increasing our investment in our marketing, selling and clinical research capabilities here,” he said in an interview at the Fortune Global Forum in Cape Town today. “There is scope for continued investment. Our business here is growing faster than the market here.”

AstraZeneca needs new sources of revenue to offset potential competition to seven drugs by 2014, three of which are its biggest sellers: Nexium for ulcers, the antipsychotic Seroquel and Crestor for cholesterol. The London-based drugmaker aims to boost sales from emerging markets to 25 percent of annual revenue by 2014 from 13 percent last year.

Expansion opportunities are being considered on a country- by-country basis, rather than on a regional level, Brennan said.

“China is a big opportunity, but not all the markets in Asia have the same opportunities when you compare them to Russia, to Brazil, to Argentina,” he said. “Our central Europe, Middle East and Africa operations are the ones where we will disproportionately invest. They are the opportunities for future growth.”

AstraZeneca is focusing on sales of branded drugs to the growing middle classes in emerging economies. That strategy has curtailed expansion in the rest of sub-Saharan Africa, the world’s poorest region.

“It is going to take some time” for other African markets to develop, Brennan said. “The needs of those people from a medical perspective are probably different from our offerings, because we’re traditionally a Western-based company. A lot of our research and development is in Western diseases.”

To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.