Japanese generic drugmaker Nichi-Iko Pharmaceutical Co. and Sanofi-aventis of France said today they have agreed to form a new joint venture in Japan to manufacture and market generic drugs.
The two firms are the latest to vie in the growing generic drug market in Japan, which Sanofi-aventis aims to break into ahead of its other foreign rivals. Generic drugs are priced lower as they are made of ingredients for which patent production has expired.
Sanofi-aventis Nichi-Iko K.K., to be held 51 percent by the French firm’s Japanese unit and 49 percent by Nichi-Iko, will be set up in June. The new firm will be headquartered in Tokyo.
Nichi-Iko will also issue new shares to Sanofi-aventis in a third-party allocation worth approximately 4.4 billion yen as part of the deal to form the joint venture.
Following the new share allotment, the French drugmaker will own a stake of 4.66 percent in the Japanese firm.
As a first step to their partnership, Sanofi-aventis Nichi-Iko will market Amoban, which is a treatment for insomnia, the two companies said. Sales of Amoban in fiscal 2009 totaled 5.1 billion yen.
“Both companies continue to explore additional opportunities for the development of the joint venture in the generic market in Japan by combining Nichi-Iko’s expertise in manufacturing, development and distribution of generics in Japan and Sanofi-aventis’ resources and global portfolio of generics,” said a statement released by the French drugmaker.
Olivier Charmeil, senior vice president of the Asia Pacific & Japan operations of Sanofi-aventis, said in the statement that the French firm hopes to “develop a strong presence in the fast-growing generic market in Japan,” by providing it “with high quality and affordable pharmaceuticals.”
Sanofi-aventis is a leading global firm that focuses on new drugs and also has a generic drug business in Eastern Europe and South America.
Headquartered in Toyoma City, Nichi-Iko’s main business is generic medicines.