After offloading a big chunk of their Japanese generics joint venture in 2020, Teva and Takeda have decided to divest the business in its entirety so they can each focus on their innovative medicines.
Teva has reached an agreement to sell Teva Takeda Pharma to JKI, which was established by private equity firm J-Will Partners, the Israeli pharma company said Thursday. To make the deal happen, Takeda is transferring its 49% share in the joint venture to Teva, which owns the remaining 51%, according to the Japanese pharma.
The joint venture, established in 2016, is focused on generic and off-patent drugs in Japan.
No financial details were disclosed. Teva said it expects the deal to be completed by April 1.
Divesting the generics and legacy products business will allow Teva to focus on bringing its innovative medicines to Japan, the company said.
“This is another step in our Pivot to Growth strategy to focus the business,” Mark Sabag, Teva’s commercial chief of international markets, said in a statement Thursday. “Furthermore, we are confident that this agreement with JKI will ensure the continued delivery of high-quality, affordable medicines to patients in Japan.”
For its part, Takeda also highlighted its focus on developing innovative treatments. The decision to sell “was taken after careful consideration of Takeda’s sustainable growth strategy and that of Teva, as well as the evolving pharmaceutical industry environment in Japan,” Takeda said in its own statement.
In May, Takeda launched a major, multi-year restructuring campaign to bring its core operating profit margin above 30% through “organizational agility,” procurement savings and tech efficiencies. That means resources are now being channeled to the company’s late-stage pipeline and the most promising products.
Besides R&D reprioritization, Takeda has also made plans to lay off or transfer about 1,000 U.S. employees, according to Japanese media reports. Publicly disclosed layoffs are already bringing the tally close to that number.
As for Teva, its latest move in Japan doesn’t reflect the company’s overall commitment to generics and biosimilars. In fact, generics and biosimilars remain the backbone of Teva’s business and, in the third quarter, were a major growth driver.
“Our third pillar was about creating a sustainable generics powerhouse,” Teva CEO Richard Francis, who introduced the “Pivot to Growth” strategy last year, said in an interview with Fierce Pharma in November. “In no way were we in a sense stepping away from generics.”
The Teva-Takeda venture that JKI is inheriting is not the same business that Takeda and Teva established in 2016. Back in 2020, when Teva was struggling, the joint venture offloaded most of its generics portfolio and a manufacturing site to Nichi-Iko Pharmaceutical, leaving only some core specialty drugs and targeted generics. At that time, Teva said the remaining business included 20 small-molecule generics and several pipeline assets.