Aesica looks to Japan, hooks up with CDMO there

Japan is the second-largest pharma market in the world, but drugmakers see that it still has lots of upside and want to be there. Contract manufacturers are no different.

And so U.K.-based CDMO Aesica Pharmaceuticals said it has struck a deal with a peer in Japan to help each other's clients there, as well as in Europe and the U.S. The agreement is with CMIC Holdings, a contract manufacturer and drug developer that has operations in the U.S. and Korea, as well as Japan. Aesica CEO Robert Hardy said, "This agreement will provide a tremendous opportunity to develop business and commercial opportunities for our customers in the Japanese market and in the U.S."

So why do drugmakers and contractors of all stripes covet the Japanese market? Because it is large and the government is looking to generics to slow healthcare costs. But Japan is also looking for some new treatments that have not been available there before. And lots of drugmakers are looking to beef up in the country as the U.S. and European markets become increasingly harder to drive growth in.

Pfizer ($PFE) and Mylan ($MYL) struck a deal in August to make and sell 350 off-patent drugs there. Pfizer will handle marketing and sales of those 350 drugs, some from Pfizer's stable and others from Mylan's. Mylan will focus on operations, including R&D and manufacturing.

Others are headed to Japan as well. Teva Pharmaceutical Industries ($TEVA) is cutting its workforce and consolidating production elsewhere, but in Japan it will invest more than $200 million into new facilities to make sure it has the capacity it needs to realize the potential there. Teva is the world's largest generics maker, and it believes its expertise in making and selling cheap drugs is ideal for the Japanese market.

- here's the announcement