The new unit, which is expected to become fully operational next year, will leverage its parents’ marketing, R&D, production and distribution capabilities in the provision of non-branded products for the country’s drug sector, which is the world’s second largest.
At present, generics make up only 17 per cent of the $80bn a year drug market, according to data from IMS Health. However, this situation looks set to change following the Japanese finance ministry's 2007 announcement of plans to double the utilisation of non-branded pharmaceuticals by 2012.
Speaking at the new entity’s launch, Teva CEO Shlomo Yanai said that Teva-Kowa will combine his firm's expertise in the development of generics with Kowa’s “knowledge of and established reputation within the [highly regulated] Japanese [pharmaceutical] market.”
He predicted that Japan’s consumption of non-branded drug products will “double in volume over the next five years,” and added that the new joint venture “should enable us to maximize the opportunity available in this important growth market.”
Shlomo also suggested that there is scope for stronger price competition in the Japanese generics market in an interview with the Financial Times.
Yoshihiro Miwa, CEO of Nagoya-headquartered Kowa, said that, in addition to making strategic sense, the partnership will support the firm’s diversified business operations in the prescription and over over-the-counter drug sectors.
Teva declined to answer any of in-PharmaTechnologist.com questions about Teva-Kowa’s manufacturing setup or product portfolio. As present the Israeli firm sells a range of drug products and active pharmaceutical ingredients (APIs) in Japan through its TAPI subsidiary in the capital Tokyo.
Still on the acquisition trail despite Barr delays?
The launch of Teva-Kowa is likely to be a welcome distraction for Teva from ongoing delays to its $8bn acquisition of US generics firm Barr Pharmaceuticals.
While the companies have agreed the transaction, the US Federal Trade commission has requested additional information, extending the Hart-Scott-Rodino antitrust waiting period.
Despite this, Teva and Barr still anticipate that the deal will go through before the end of the year. If so, Teva would have a 24 per cent share of the US generics market, further strengthening its position as the global leader in non-branded pharmaceuticals.
More recently on the acquisition front, Teva denied that it would make a bid for German generics group Stada following several months of industry speculation.
Speaking at this year’s Generic Pharmaceutical Association conference in Washington, William Marth, head of Teva’s North American operations told Reuters that: "I currently don't think that would be a good acquisition for us."
He added however that: "there are probably going to be other opportunities around Japan, Brazil and more in Russia that would probably be more attractive."