Burying The Hatchet Buys A Lot Of Drug Research

It's a deal that had been brewing for two years--and which many industry insiders had expected for months. Now the world's largest drug company merger--the $174 billion combination of Britain's Glaxo Wellcome and SmithKline Beecham is all but a done deal.

Despite all the anticipation, it's still shaking the global drug industry. First, there's the sheer size: The combined company will have $25 billion in total revenue, making it the biggest drug company in the world. Together, Glaxo SmithKline will have 107,000 employees around the world and an unrivaled research and development budget of $4 billion. That, says Jean-Pierre Garnier, the SmithKline Chief Operating Officer who will be chief executive of the combined company, will keep it at the cutting edge of new drug discovery, particularly biotech products. "Dollar for dollar we have the opportunity to discover more drugs than any of our competitors," says Garnier. And Glaxo SmithKline will employ the biggest pharmaceutical sales and marketing team in the world--40,000 strong--to sell them. Finally, it will have the financial resources to pursue more deals. Glaxo chief Sir Richard Sykes hinted that the new company is already looking for targets.