Drug maker Beximco Pharmaceuticals Ltd. (BXP.LN) Wednesday said it is in talks with major Western pharmaceutical companies about manufacturing their products under contract at its facilities in Bangladesh.

Dhaka-based Beximco has held talks with companies including GlaxoSmithKline PLC (GSK.LN), Novartis AG (NOVN.VX) and Watson Pharmaceuticals Inc. (WPI) about making medicines under license for sale in developing markets and possibly in the West, Managing Director Nazmul Hassan told Dow Jones Newswires.

The company already makes some big drug makers' products under license, like GlaxoSmithKline's asthma medicine Ventolin.

Beximco is seeking to exploit two key trends in the pharmaceutical industry: drug makers' desire to grow sales in emerging markets and their desire to trim costs.

Hassan said Bangladesh is one of the cheapest places to manufacture drugs in the world because white collar staff like pharmacists and engineers are paid less there than in rival countries like India or China. Electricity is also cheaper, he added.

Hassan said Beximco's facilities have passed inspections by Australian, Middle Eastern and Brazilian authorities and the company is applying to have them approved by the U.S. Food and Drug Administration and the U.K.'s Medicines and Healthcare Products Regulatory Agency. South African approval is expected shortly.

Such approvals would firm up its facilities' credentials and help it win manufacturing business, he said.

Contract manufacturing of prescription drugs was worth $27 billion a year globally in 2007 and will rise to $70 billion by 2012, according to Beximco, which is listed on London's junior Alternative Investment Market.

Beximco's main business currently is selling branded generic medicines in Bangladesh and other developing countries, where it competes with Indian rivals and big generic companies like Teva Pharmaceutical Industries Ltd. (TEVA).

Tuesday, it reported a 21% year-on-year rise in revenue in 2009 to 4.87 billion Bangladesh taka, or roughly GBP47 million, driven largely by exports and new products. It registered 51 generic medicines in 12 countries, and introduced 26 new drugs to its portfolio of more than 400.

Earnings also benefited from political stability in Bangladesh following upheavals in 2007, which Hassan said stalled the company's progress.

Company Web site: www.beximco-pharma.com

-By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; jason.douglas@dowjones.com