Aiming to boost its Japanese sales to $1 billion, Teva Pharmaceutical Industries ($TEVA) has bought out its joint venture partner there. The Israeli drugmaker paid $150 million in cash for Kowa's 50% stake in their partnership, which has grown to $200 million in sales since its inception in September 2008.
The JV buyout follows Teva's $934 million acquisition of Taiyo Pharmaceutical in July. Taiyo is Japan's third-largest generics maker, while Teva-Kowa Pharma had grown into fifth place. "We are happy to have reached this agreement to bring all our Japanese operations under Teva's full control and ownership," CEO Shlomo Yanai said in a statement. "Full ownership... will allow us to better grow our business in Japan."
The JV buyout will bring Teva's Japanese sales to about $800 million, the company said. And by 2015, the company will get to $1 billion annually, Yanai told Reuters. "We are much more prepared for the Japanese market and can be more efficient in our activities in Japan. We don't have the limitations of a partnership," Yanai told the news service. "This is part of our long-term penetration of Japan so that we can have a substantial presence."
Teva sees big potential for growth in Japan partly because generics only account for 23% of the market right now. Over the next few years, some $17 billion worth of drugs will see their patents expire, giving Teva plenty of potential new products. Plus, the population is aging, meaning demand for drugs is likely to increase.