Indian drugmakers eye Japanese market for acquisitions

Indian drug companies are said to be trying to widen their presence in Japan, the world's second-largest pharmaceutical market, according to a report by Livemint.

ET Now Television reported last week that Sun Pharmaceutical Industries was said to be in the process of buying the Japan-branded portfolio from Novartis ($NVS), but Livemint could not confirm the report and said a Sun spokesman declined to comment.

A separate story in the Business Standard said the Sun-Novartis deal could be concluded by December and may be worth as much as $400 million.

The last time an Indian company was able to buy into the Japanese market was in 2011 when Lupin made an acquisition in the $115 billion market there. Lupin bought Tokyo-based I'rom Pharmaceutical in 2011 and Kyowa Pharmaceutical Industry in 2007.

On the other side of the coin, Japanese companies have been cautious on India since Daiichi Sankyo stumbled in the 2008 purchase of Ranbaxy Laboratories. This year, Daiichi was able to exit Ranbaxy as part of an initial all-stock deal of $3.2 billion paid by Sun Pharmaceutical Industries for majority control that closed early in the year. Subsequently, Daiichi sold its remaining stake.

Japan is under pressure to rein in healthcare costs, which are spiraling upward because of the country's aging population. The government wants to increase the use of generics, which are India's specialty.

Nilesh Gupta

"Currently, the Japanese government is pushing heavily for the consumption of generic drugs, from 30% in 2014 to 60% in next couple of year," Nilesh Gupta, Lupin's managing director, told Livemint in an interview in August.

"We see tremendous potential in areas of central nervous system and cardiovascular (drugs) in Japan, and are keen for more acquisitions," Gupta told Livemint.

- here's the story from Livemint
- and one from the Business Standard

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