Glaxo Smithkline: Powerful Medicine

Glaxo rocks the drug industry, but could this deal be too big?

It was a global drug reaction. The news that Glaxo Wellcome PLC and SmithKline Beecham PLC were in merger talks has sent shock waves through the pharmaceutical industry. It's not just the prospect of a new giant in the market--a global behemoth that would have combined revenues of about $19 billion a year. The more frightening prospect is that the combination of the No.1 and No.10 drugmakers would produce a competitor that can pump more than $3 billion a year into developing new drugs--three times what Novartis, the closest rival in research spending, is shelling out.

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