Sanofi-Aventis (NYSE: SNY) is having a busy week. Yesterday, the French drugmaker announced an agreement with the Massachusetts Institute of Technology Center for Biomedical Innovation, through which the company will gain the opportunity to develop therapeutic, diagnostic and prognostic applications based on the discoveries. And now the Nikkei business daily is reporting that the company is forming a capital and operational tie-up with Nichi-Iko Pharmaceutical in an attempt to enter that country's generic-drug market.
CEO Chris Viehbacher (photo) said Sanofi would aim to grab the No. 5 spot in Japan's drug market in five years, up from No. 10 now. However, he did not confirm the report it would invest in the Japanese drugmaker. As the International Business Times notes, the Japanese generic market has been surging because of a state plan to contain the cost of healthcare. Additionally, a major portion of country's pharmaceutical products are currently off-patent, with many more to become so by 2012.
Under the agreement, Sanofi will invest roughly ¥5 billion (about $55 million) to obtain nearly a 5 percent stake in Nichi-Iko, making it the second-largest shareholder of the company after its founding family, Reuters cites Nikkei as saying. However, Nichi-iko maintains that no decision has been made on an alliance with the French drugmaker. But, according to Reuters, Nichi-Iko was awash with buy offers after the Nikkei business daily reported the proposed deal.
The companies reportedly will form a joint venture, with Sanofi obtaining a 51 percent stake and Nichi-Iko set to hold the remaining 49 percent, the daily said, adding that the firms hope to develop bioengineered drugs down the road.
Founded in 1965, Nichi-Iko focuses on generic drugs, according to the company's website. But it also sells Sedapain, an analgesic developed in-house, and Unicon Tablets, which are controlled-release theophylline tablets imported from overseas. It says it had sales of about 52.497 billion yen through the November 2009 settlement term.
Sanofi is hardly the only firm looking to make inroads in the Japanese generics market. Fujifilm Holdings and Mitsubishi recently announced that they are planning to set up a generic joint venture. And Pfizer (NYSE: PFE) promises that it will make a push next year to enter the market. And don't count Teva (NASDAQ: TEVA) out with its joint venture with Kowa.
Rumors of the deal comes days after Sanofi agreed to buy Polish consumer healthcare group Nepentes in a deal valuing it at around 105 million euros ($130.4 million). And Sanofi has been eyeing generics deals: In the past two years, the French pharma snapped up Laboratorios Kendrick, a Mexican drugmaker, and completed its buyout of Czech generics leader Zentiva.
- see the Sanofi release on the MIT agreement
- read the International Business Times report
- check out the Reuters report
- see more from Reuters
- get an update from Reuters
- read the article from Bloomberg
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