Sanofi, Nichi-Iko announce generic drugs venture
French pharmaceutical giant Sanofi-Aventis and Japan's Nichi-Iko Pharmaceutical Friday announced a joint venture to boost their profile in Japan's fast-growing generic drug market.
The partnership will give Sanofi-Aventis, the world's sixth largest pharmaceutical group, access to a market set to benefit from a government target to nearly double the use of generic drugs to 30 percent by 2013.
The venture, which will be known as Sanofi-Aventis Nichi-Iko once set up in June, will be 51 percent held by the French firm's Japanese unit and 49 percent by Nichi-Iko. It will be headquartered in Tokyo.
The deal will see Nichi-Iko issue 4.4 billion yen (48.2 million dollars) worth of shares to Sanofi-Aventis at 2,894 yen per share in June, giving the French giant a 4.66 percent stake in its Japanese partner.
Sanofi-Aventis chief executive Christopher Viehbacher had said Thursday the company was considering a tie-up with a Japanese partner in an effort to gain access to Japan's generic drug market.
The market is still underdeveloped in Japan and soaring healthcare costs driven by an ageing population have prompted the government to work towards expanding their use.
Competition is intensifying with other pharmaceutical companies in Japan looking to boost sales of generics including Daiichi Sankyo, which owns 64 percent of India's top generic maker Ranbaxy Laboratories.
© 2010 AFP