Japan’s Takeda has reached a deal to buy a subsidiary of Turkish pharma company Neutec, giving it a firmer foothold in Turkey’s $8.4bn medicines market.
Takeda has agreed to acquire Toplam Kalite for up to 300m Turkish lira ($122m) in cash and undisclosed milestone payments, taking control of 13 products in the gastroenterology, respiratory, metabolic and musculoskeletal therapeutic areas.
The acquired products will continue to be manufactured by Neutec, according to Takeda, which said it already employs around 130 people in its Turkish operations adding that the acquisition would allow it to create another 100 positions.
“This agreement demonstrates Takeda’s continued commitment to patients in Turkey, a key country within the region and the largest pharmaceutical market in Eastern Europe and the Middle East,” commented Danilo Cassani, who heads up Takeda’s Near East, Middle East and Africa operations.
Along with fellow MINT bloc countries Mexico, Indonesia and Nigeria, Turkey is considered an attractive market for the pharma industry thanks to its increasingly affluent population and long-term growth potential, although pricing reforms pegged back market growth to around 6% last year.
Near-term growth in Turkey has been hit by a decline in pharma sales, however, thanks to recent changes in the national social security system (SGK) relating to reimbursement of medicine costs, according to a recent report from Business Monitor International (BMI).
Now, only the cost of the cheapest generic in several drug classes (including astrointestinal drugs, antibiotics and blood pressure medicines) can be recouped, so patients wanting a more expensive product have to fund the difference out-of-pocket
Nevertheless, “in contrast to European markets where manufacturers can expect to achieve higher prices, but with a stagnant growth outlook, Turkey offers strong growth potential,” says BMI – provided pharma companies “are able to accept prices that are considerably below the European average and turn a profit on the low margins available.”
Other companies investing in Turkey of late include Amgen – which bought local producer Mustafa Nevzat in 2012 for $700m – while Sanofi, Otsuka and Recordati are among companies building manufacturing capacity in the country and GlaxoSmithKline (GSK) recently established its regional headquarters there.
The establishment of technology development zones that exempt pharmaceutical entrepreneurs and academic institutions from income taxes until 2023 have contributed to the inward investment.
Opens new HQ in Singapore
Meanwhile, Takeda has officially opened a new office in Singapore that will serve as the group’s emerging markets business headquarters, as well as housing its Asian development centre and vaccines business unit.
The company said the new office’s location will allow it to “more easily focus on global clinical development activities, educational initiatives and collaboration with global commercial teams.”