Teva and Kowa to create a generic pharmaceutical company in Japan

Two leading pharmaceutical companies are to collaborate on establishing a leading generic pharmaceutical company in Japan.

Two leading pharmaceutical companies are to collaborate on establishing a leading generic pharmaceutical company in Japan.

Teva Pharmaceutical Industries in Jerusalem, Israel and Kowa Company in Tokyo have signed a definitive agreement to establish Teva-Kowa Pharma Co. The new company will seek to leverage the marketing, research and development, manufacturing and distribution capabilities of each company to become a broad based supplier of high quality generic pharmaceutical products for the Japanese market and reach sales of US$1bn in 2015. Each company will have a 50% stake in Teva-Kowa Pharma, which will become operational in 2009.

"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 maximise the opportunity available in this important growth market," said Shlomo Yanai, Teva's president and chief executive officer. "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. This strategic partnership is an important milestone in executing Teva's five year strategic plan, as it provides a robust platform for Teva to further strengthen its global leadership and establishes a strong presence in the Japanese market."

Yoshihiro Miwa, Kowa's president and chief executive officer, said: "I am delighted to be able to report this agreement with Teva, the world's top generic pharmaceutical company, which will enable us to offer high quality generic pharmaceutical products to patients in Japan."

The agreement is expected to enhance Kowa's efforts to establish a strong management platform to support diversified business operations in the prescription, over-the-counter and generic pharmaceutical products areas.

"By combining our respective capabilities in a new company, Kowa and Teva are creating a unique business model and a robust base in Japan's generic pharmaceuticals market," Miwa said.

Japan is the second largest pharmaceutical market in the world, valued at approximately $80bn (1$=100 JPY). Generics represent only 5.7% in value (approximately $4.6bn) or 16.9% in volume in 2006 according to the IMS and the data from the Japanese Generics Manufacturing Association.