Glaxo eyes Bristol-Myers

London-based GSK is facing growing competiton from generic drug makers

LONDON, England -- GlaxoSmithKline, Europe's biggest drugmaker, is looking at struggling Bristol-Myers Squibb as a possible takeover target.

Chief Financial Officer John Coombe said on Tuesday his company is monitoring developments at U.S.-based Bristol-Myers, along with other pharmaceuticals companies that may be ripe for a takeover.

"Everyone accepts that Bristol-Myers Squibb is now vulnerable, and for good reason," he told an investors conference in London.

"We are not itching to do another deal. Obviously BMS is on our radar screen and we are looking at it but at the moment we are just in monitoring mode on BMS and all the other (takeover) candidates."

Coombe said the pharmaceuticals industry is facing more consolidation as companies struggle to develop new products to combat growing competition from low-price generic drugs.

London-based GSK is said to be looking for acquisitions to bolsters its earnings and avoid a slowdown in growth that has plagued other drug companies. It is also threatened by the possible loss of patent protection on its best selling antibiotic Augmentin and antidepressant Paxil.

Bristol-Myers is seen as a likely takeover target after being hit by a number of product setbacks. It is facing competition from generic versions of three of its main products -- cancer drug Taxol, diabetes treatment Glucophage and anxiety medicine BuSpar.

If London-based GSK was to buy Bristol-Myers, the combined company would have a market capitalisation of $200 billion.

GSK and U.S.-based Pfizer each have a global market share of 7 percent. Coombe said both companies are much larger than their closest competitors and are not under immediate threat of takeover themselves.

GlaxoSmithKline (GSK) shares were down 0.3 percent in midday London trading on Tuesday.