S-A to enter Japanese generic drug market

Sanofi-aventis (S-A) will form a generic drug venture with Nichi-Iko Pharmaceutical to enter Japan's generic drug market.

S-A will pay Nichi-Iko $48.4m for a 4.7 per cent stake in the Japanese drug maker and hold a 51.0 per cent stake in the venture to sell S-A's insomnia drug Amoban (zopiclone) in Japan's $97bn drug market.

Nichi-Iko generated sales of 54.8bn Japanese yen ($601m) in 2009.

Olivier Charmeil, S-A's senior vice president, Asia Pacific & Japan commented on the venture: "It will allow us to strengthen our leadership and develop a strong presence in the fast growing generic market in Japan."

The venture aims to capitalise on the Japanese government's push to increase usage of generic drugs. It aims to increase generic share in the total pharmaceutical market from its current 20 per cent to 30 per cent by 2012.

S-A has been steering away from focusing on blockbuster drugs, which are increasingly difficult to develop and are vulnerable to patent challenges. It has been seeking to expand into areas such as generics, consumer health and emerging markets.

After the announcement of the venture, Nichi-Iko shares were up 1.2 per cent.