GlaxoSmithKline prepares for credit dry-up

GlaxoSmithKline is preparing for the effects of the credit crunch by slowing its share buy-back programme, it has been reported.

The company has reduced the purchase of its own shares to 300 million pounds since July, the Financial Times (FT) said ? and is expected to review its plans to spend one billion pounds on buying back shares over the last five months of 2008.

Action such as this is to build up cash reserves for prospective deals in preparation for a lack of available external credit.

Other large pharmaceutical manufacturers have also taken steps to adapt to market conditions, the FT said.

In a recent report, rating agency Standard & Poor’s concluded: “Big pharma, despite becoming more active on the acquisition front of late, continues to maintain very strong financial risk profiles.”

The report added lower-rated speciality and biotech pharmaceutical firms may experience credit problems.

GlaxoSmithKline’s over-the-counter products include Panadol, Aquafresh and NiQuitin.