Sanofi-aventis and Generics Leader Nichi-Iko to Establish New Joint Venture for Generics in Japan
Paris, France - May 28, 2010 - Sanofi-aventis (EURONEXT: SAN and NYSE: SNY) and Nichi-Iko Pharmaceutical Co., Ltd. (Nichi-Iko) (Osaka Stock Exchange and Nagoya Stock Exchange: NIK) announced today that they have signed an agreement to establish a new joint venture, called sanofi-aventis Nichi-Iko K.K., in order to develop a generic business in Japan.
The new joint venture will be held at 51% by sanofi-aventis K.K. and at 49% by Nichi-Iko. In addition, sanofi-aventis will acquire 1,524,500 shares of Nichi-Iko, to be issued through a third-party allocation, and as a result will hold 4.66% of Nichi-Iko. Nichi-Iko is the leader and fastest growing generics company in Japan, with 2009 sales reaching 54.8 billion JPY - around 460 million Euros*.
"We are extremely pleased to establish this joint venture with Nichi-Iko, that will allow us to strengthen our leadership and develop a strong presence in the fast-growing generic market in Japan," said Olivier Charmeil, Senior Vice President, Asia Pacific & Japan, sanofi-aventis. "Our objective is to provide the Japanese generic market, which is expected to further expand in the future, with high quality and affordable pharmaceuticals, supporting the government's stated objective of increasing generic penetration. This strategic agreement between Nichi-Iko and sanofi-aventis will leverage both companies' respective strengths to meet the needs of medical institutions and patients."
"We are equally gratified to form this long-term partnership which will enable us to combine Nichi-Iko's expertise in generic business in Japan and sanofi-aventis' resources," said Yuiichi Tamura, Nichi-Iko President and Chief Executive Officer. "This announcement will deliver a strong message of a new strategic alliance in the market, showing clearly our willingness to further expand the generic market in Japan."
As a first step, the joint venture will take over the marketing and distribution rights in Japan for the antiinsomnia agent AmobanTM (zopiclone) from sanofi-aventis K.K. AmobanTM sales reached 5.1 billion Yen - or 43 million Euros* in 2009. Nichi-Iko will ensure the promotion and distribution of AmobanTM through its large network of pharmacies, wholesalers and medical institutions. Both companies continue to explore additional opportunities for the development of the joint venture in the generic market in Japan by combining Nichi-Iko's expertise in manufacturing, development, and distribution of generics in Japan and sanofi-aventis' resources and global portfolio of generics.
About the generics market in Japan
Today, Japan is the world's second largest pharmaceutical market, with annual sales of approximately 8.85 trillion JPY (based on NHI price) - around 74 Billion Euros*. Around 8 % of its prescription drug sales (20 % in sales volume) are generics. By 2012, a combination of major drug patent expiries, a rapidly aging demographic, and wide ranging government initiatives to reduce health care spending are making the generic drug sector in Japan increasingly attractive. The Japanese government is promoting the use of generics with the objective to reach more than 30% of the total pharmaceutical market in volume by 2012. *exchange rate at 1 euro = 120 JPY