GSK announces new strategic investments in Africa to increase access to medicines, build capacity and deliver sustainable growth

• Creates world’s first R&D Open Lab to increase understanding of non-communicable diseases and support development of new medicines for Africa
• Significantly increases African manufacturing presence to build  capacity and enhance regional self sufficiency
• Establishes 25 academic Chairs at African universities to support development of local skills and capabilities in science, engineering, public health and other related areas
• Commits to train an additional 10,000 community healthworkers across sub-Saharan Africa

GSK today announced a series of new investments in sub-Saharan Africa designed to address pressing health needs and contribute to long-term business growth.  Speaking at the 5^th EU-Africa Business Forum in Brussels, GSK CEO Sir Andrew Witty set out the company’s intent to partner with governments of African countries to help stimulate more research into chronic diseases, increase capacity by localising medicines supply and strengthen healthcare infrastructure.

This will see GSK make targeted investments of up to £130 million in Africa over the next five years, creating at least 500 jobs and contributing to the development of home-grown capabilities and skills in Africa. This builds on GSK’s existing business base in sub-Saharan Africa, which currently employs around 1,500 people in over 40 countries, including at three existing local manufacturing sites in Kenya, Nigeria and South Africa.

Speaking at the meeting, Andrew Witty said: “Today, we are setting out further steps to tackle Africa’s dual health burden of infectious and emerging non-communicable diseases and help build crucial capacity to underpin the development of the healthcare sector in the region.  We have a unique opportunity to deliver meaningful social and economic value to all of the communities we work in – using our scientific expertise and our global reach to develop innovative medicines and deliver them to people who need them around the world.

“With global attention focused on how we support development beyond 2015, now is the moment for business to play a more active role in contributing to a more prosperous future in Africa, investing in infrastructure, building skills and capability to unlock human potential and create jobs. Our long-term goal is to equip Africa to discover, develop and produce the medicines required for Africa.”

Supporting the development of new medicines for Africa

GSK will invest £25 million to create the world’s first R&D Open Lab for non-communicable diseases (NCDs) in Africa. This builds on the success of GSK’s Open Lab in Tres Cantos, Spain which gives independent researchers access to GSK facilities, resources and knowledge to help them advance their own research projects into diseases of the developing world such as malaria, tuberculosis and leishmaniasis.

The new R&D Open Lab for NCDs in Africa will see GSK scientists collaborate with research and scientific centres across Africa from its hub at GSK’s Stevenage R&D facility in the UK to conduct high quality epidemiological, genetic and interventional research to increase understanding of NCDs in Africa. An independent governing board of leading scientists and clinicians will oversee the implementation of NCD research projects within a dynamic and networked open innovation environment.

The open lab aims to improve understanding of NCD variations seen in the Africa setting, which could include for example the apparent higher prevalence of treatment-resistant hypertension and aggressive breast cancers in younger women. It is hoped that these insights will inform prevention and treatment strategies and will enable researchers across academia and industry to discover and develop new medicines to address the specific needs of African patients.

The open lab will directly support the training and education of African scientific researchers who will participate in a portfolio of projects, building local expertise, creating a new generation of African NCD experts while instilling a deep vein of ‘African thinking’ within GSK’s own R&D organisation.

Forming innovative partnerships to transform medicines supply in Africa

Over the next five years, GSK will look to partner with a number of African countries to develop domestic manufacturing capacity and capability. This will see GSK invest up to £100m to expand its existing manufacturing capability in Nigeria and Kenya and build up to five new factories in Africa. The company is currently reviewing possible locations in countries including Rwanda, Ghana and Ethiopia and the selected sites will be announced in due course and subject to Government agreement.

The new facilities will be built to globally recognised good manufacturing practice (GMP) standards and will make locally relevant products such as antibiotics and respiratory and HIV medicines (on behalf of ViiV Healthcare). The initial focus will be on secondary manufacture with the aim to transfer the technology, skills and knowledge needed to enable the local manufacture of more complex products over time. The factories will create a network of localised industry and local employment for a highly skilled workforce drawn from surrounding communities.

To support the scale-up of domestic manufacturing and supply, GSK will establish up to 25 academic Chairs at local African universities in related areas such as pharmaceutical sciences, public health, engineering and logistics. These roles will facilitate the development of new courses as well as internships and student exchanges, and will be pivotal to ensuring manufacturing capability is locked into the continent to help attract further manufacturing investment.

GSK is also taking steps to improve and simplify its supply chain with the creation of regional supply hubs that will help to reduce stock shortages and local supply partnerships to enable more GSK products and medicines to reach under-served rural communities in Africa. These steps will help reduce Africa’s reliance on imported medicines, improving the security of supply and reducing production costs and transportation which in time should help contribute to lower prices.

Creating a tailored portfolio of medicines to address Africa-specific health needs

GSK will also optimise its portfolio of medicines for NCDs by working in collaboration with its local partner, Aspen, and with regulators to increase the registration of medicines and vaccines in its existing portfolio, such as its Amoxil antibiotic and its Ventolin respiratory medicine, where not already available.

At the same time, the company continues to work to develop new products designed to meet the specific needs of Africa, for example through its ongoing work with partners to develop the world’s first vaccine against malaria and to create new nutritional products fortified with micro-nutrients to tackle childhood malnourishment.

Playing a part in strengthening healthcare systems

GSK will also increase its support for community health worker training, in recognition of the vital role they play in delivering basic healthcare to many communities. As part of its initiative to reinvest 20% of any profits generated in LDCs back into strengthening healthcare infrastructure in those countries, GSK is already supporting the training of 15,000 healthcare workers with its NGO partners by the end of 2014.

GSK’s commitment to healthcare worker training will now be expanded to include low- and middle-income countries in sub-Saharan Africa. Over the next three years, GSK will partner with charities to help train and upskill 10,000 community healthcare workers across Kenya, Ghana and Nigeria under the umbrella of the One Million Community Health Worker campaign, a UN-led initiative directed by Professor Jeffrey Sachs. The investment will be targeted at supporting the most remote and marginalised communities to help address healthcare inequalities that exist even in fast-growing countries.

These changes build on steps taken by GSK over the past six years to modernise its business model and help improve access to medicines in developing countries. This has seen the company cap the prices of its patented medicines at no more than 25% of developed world prices and reinvest 20% of any profit made back into training healthcare workers in the world’s poorest countries and pursue open innovation models for diseases of the developing world.

Notes to editors

· GSK has a long history in the developing world. Its vaccines are included in immunisation campaigns in 170 countries worldwide and of the 862 million vaccine doses delivered in 2013, more than 80% were shipped for use in developing countries.

· In 2013, GSK donated its four billionth tablet of albendazole to treat intestinal worms and lymphatic filariasis – part of the company’s long-term commitment to tackle neglected tropical diseases which affect people in the world’s poorest countries.

· GSK has formed a ground-breaking five-year partnership with Save the Children, to help save the lives of one million children living in the poorest countries in Africa. The partnership combines the resources and capabilities of two organisations to help bring medicines and vaccines to some of the world’s poorest children, train thousands of healthcare workers, and seek to alleviate child malnutrition.

GSK – one of the world’s leading research-based pharmaceutical and healthcare companies – is committed to improving the quality of human life by enabling people to do more, feel better and live longer.  For further information please visitwww.gsk.com.

Cautionary statement regarding forward-looking statements

GSK cautions investors that any forward-looking statements or projections made by GSK, including those made in this announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Such factors include, but are not limited to, those described under Item 3.D 'Risk factors' in the company's Annual Report on Form 20-F for 2013.