3. Nichi-Iko Pharmaceutical

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By Tracy Staton

2011 generic drug sales: $1.3 billion
Growth rate 2011: 79%
Growth rate 2010: 25%

Japan is fast becoming one of the world's bright spots for pharma growth. After some stagnant years--and a stagnating regulatory approach--the country has accelerated product approvals and revved up healthcare spending, partly because of its aging population. Japanese drugmakers such as Nichi-Iko Pharmaceutical are finding themselves popular with foreign companies aiming for quick access to this growing market.

Japan is particularly attractive to generics makers, as the government aims to allot a larger chunk of its overall drug spending on knockoffs. New policies--including rules that require doctors to specify generic alternatives to branded scripts--are designed to push generics use to 30% by March of next year. At the end of December, that share stood at 23.6%.

No wonder, then, that Sanofi ($SNY) hooked up with Nichi-Iko in 2010. The two companies set up a joint venture 51% owned by Sanofi, which put up $48.2 million. Sanofi got 4.66% of Nichi-Iko as part of the deal. The two companies are hoping their combined efforts will yield their share of Japanese generics growth. They'll be competing with plenty of other partnerships that want to do the same thing.

Among the assets Nichi-Iko brings to the table are 5 manufacturing plants, an R&D site, and three distribution facilities around the country. The company recently wrapped up construction on a new R&D and quality control addition to an existing plant,

Another deal that set the stage for Nichi-Iko's strong 2011 growth was its acquisition of a 33.4% stake in Aprogen, the South Korean drugmaker. The Japanese company forked over $12 million for that share. Nichi-Iko also teamed up with Switzerland's DKSH Group to market products in Thailand, Malaysia and Hong Kong.

Note: Nichi-Iko is aiming to be one of the world's top 10 generics makers within 5 years. Its impressive 2011 growth will no doubt help. But, to be fair, part of that growth is an accounting glitch; it changed its fiscal year to end in March 2012, so 2011 sales include a few extra months.