|AstraZeneca CFO Marc Dunoyer--Courtesy of AstraZeneca|
Japan is the second largest drug market after the U.S., and Western drugmakers are giving it new attention as growth slows elsewhere. AstraZeneca ($AZN) has upped its bet there, paying Sumitomo Chemical about $102 million to buy full control of its Japanese subsidiary AstraZeneca KK.
AstraZeneca CFO Marc Dunoyer explained the company's rationale Wednesday in a statement. "Our decision to gain full control of AstraZeneca KK reinforces our focus on Japan as a key growth platform."
The timing may be particularly auspicious given that Japan this week approved Forxiga, AstraZeneca's first-in-class Type 2 diabetes drug. The U.K. drugmaker now owns it exclusively after buying out its diabetes drug partner Bristol-Myers Squibb ($BMY) last year. Forxiga is a sodium glucose co-transporter-2 inhibitor (SGLT2 inhibitor) which works by pushing blood glucose out of the body via the kidneys. As Zacks points out, Japan's Astellas Pharma got to the market just ahead of AstraZeneca with a January approval for its SGLT2 inhibitor, Suglat.
The U.K.-based company has partnered with Japan's Ono Pharmaceutical to promote the diabetes drug in Japan. Once again, the drugmaker emphasized how much it likes that market. "The approval of Forxiga reinforces AstraZeneca's focus on both diabetes and Japan as two of our key growth drivers," Fouzia Laghrissi-Thode, an AstraZeneca vice president, said in a statement.
AstraZeneca's motivation for hustling more business in Japan has been writ large in its earnings reports. The company has seen big bites out of its revenues from generic competition to its blockbuster antipsychotic Seroquel and faces more as its stomach upset drug Nexium goes off patent in May. The drugmaker is in the process of laying off more than 5,500 employees as it tries to face down the sales hits.
Japan's aging population and more receptive healthcare market have set the stage for bigger sales for Western drugmakers and AstraZeneca is trying to take advantage of that in a variety of ways. In October, Johnson & Johnson ($JNJ) picked AstraZeneca as its partner in Japan for its hot cancer drug Zytiga.
- here's the buyout announcement
- here's the Forxiga release
- here's Zack's note
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