Teva Pharmaceutical and Kowa signed a definitive agreement to establish a generic pharmaceutical company in Japan. Sales from the new entity, Teva-Kowa Pharma, are expected to reach $1 billion in 2015.
Teva and Kowa will each have a 50% stake in the new firm, which will become operational in 2009. Teva-Kowa Pharma will leverage the marketing, R&D, manufacturing, and distribution capabilities of each company.
“Combining Kowa's knowledge of and established reputation within the Japanese market with Teva's global leadership and expertise in generics should enable us to maximize the opportunity available in this important growth market,” says Shlomo Yanai, Teva's president and CEO. “Our objective is to provide the Japanese generic market, which is expected to double in volume in the next five years, with high-quality and affordable pharmaceuticals, supporting the government's stated objective of increasing generic penetration.”
Japan is the second largest pharmaceutical market in the world, valued at approximately $80 billion, according to the companies. In 2006, generics represented 5.7% in value of this market, or approximately $4.6 billion, and 16.9% in volume as per IMS and data from the Japanese Generics Manufacturing Association. In 2007, the Ministry of Finance reported a plan to double generic utilization to 30% by 2012