Teva, Takeda strike generic drug distribution deal in Japan
Hoping to better weave through the complexities of Japan's changing health-care marketplace and sell more generic drugs, Teva Pharmaceutical Industries Ltd. said Monday that it was forming a joint venture with Takeda Pharmaceutical Co. Ltd.
Hoping to better weave through the complexities of Japan's changing health-care marketplace and sell more generic drugs, Teva Pharmaceutical Industries Ltd. said Monday that it was forming a joint venture with Takeda Pharmaceutical Co. Ltd.
The new company seeks to marry Teva's strong portfolio with the Japanese firm's sales force. Teva will hold a 51 percent interest in the joint venture, with Takeda holding a 49 percent share, the companies said.
In a November report, IMS Health predicted that drug spending in Japan, the world's third-largest market behind the United States and China, will increase from 3 percent to 4 percent over the next five years. While newer so-called specialty medicines, which are often injected, will take an increasing share, the report said, older brand-name drugs will face more generic competition because of government attempts to cut health-care spending for an aging population.
"The incentives to wider generic usage will double generic spending" because of Japanese government policy, the IMS Health report said. Generic use is expected to reach 80 percent by 2020, up from 54.4 percent for the quarter ending June 2015. .
Teva, based in Israel, has its Americas headquarters in North Wales, Montgomery County, and has facilities elsewhere in the Philadelphia region. Takeda is based in Osaka, and its U.S. headquarters is in Deerfield, Ill.
As in other regions, Teva has grown in Japan through corporate acquisitions, and it consolidated its holdings there into Teva Seiyaku in 2012. According to its 2014 annual report filed with the U.S. Securities and Exchange Commission, Teva had a combined 1,452 employees at sites in Takayama, Kasukabe, Koka, and Nagoya. Teva and Takeda already had a marketing deal to sell Teva's best-selling brand-name multiple sclerosis drug, Copaxone.
Teva said Monday it would benefit from Takeda's "leading brand reputation and strong distribution presence in Japan." Teva said in its annual report that generics account for about 40 percent of the Japanese drug market in volume and 10 percent of its value. Teva suspects those numbers will increase because that market is "transforming" from one where doctors make most of the choices to one where pharmacies more often switch to generics.
The joint venture will begin operating with its own CEO and board in April.
"The new business venture will combine Teva's strong generics platform, portfolio, and quality across the value chain with Takeda's leading brand presence and distribution capabilities in Japan," Siggi Olafsson, president of Teva's generics division, said.
Meanwhile, Teva also said Monday it would sell $6.75 billion in stock to help pay for its $40.5 billion acquisition of the generics unit of Allergan Plc. Teva's primary listing is on the Tel Aviv Stock Exchange. This sale will be of preferred shares and the American Depository Shares traded on the New York Stock Exchange.
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