Teva and Takeda are forming a new joint venture to operate generics in Japan

Teva Pharmaceutical Industries Ltd. and Takeda Pharmaceutical Company Limited will form a new business venture to meet the wide-ranging needs of patients and growing importance of generics in Japan, one of the fastest growing generics market in the world.

The companies explained Monday that Japan is expected to continue its high growth driven by social requirements such as increased patients’ needs for stable supply of affordable high quality medicines and the Japanese government’s policy of reduction of healthcare expenditures.

“Takeda’s leading brand reputation and strong distribution presence in Japan combined with Teva’s expertise in supply chain, operational network, global commercial deployment and infrastructure, and R&D, brings forward a new, collaborative business model in line with government objectives and ultimately serving millions of patients,” the companies said in a press release.

Subject to standard regulatory approvals, the business venture is expected to start operating in the second calendar quarter of 2016. According to the press release, Teva, the world’s largest generic drugmaker, will have a 51% stake in the new company and Takeda will have 49%. The business venture will operate as an independent company with its own Board of Directors, Chief Executive Officer, and Executive Leadership team. Further details of the agreement have not been disclosed.

Noteworthy, Given that the deal will not become effective until April 2016, there is no expected material financial impact for both Teva and Takeda in 2015, the companies said, without reveal any financial details of the partnership.

“We are delighted to partner with Teva to start the new business inJapan,” said Masato Iwasaki, Ph.D., President of Takeda’s Japan Pharma Business Unit.

“Takeda will further strengthen its initiative as a leading company in the Japanese pharmaceutical industry, leveraging our activities to lead innovation in medicine as well as supporting the new company’s business.”

“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,” said Siggi Olafsson, President and CEO of Teva Global Generic Medicines.

“This unique combination will create a company ideally positioned to lead the high growth in the generic market in Japan and is aligned with the Japanese government objectives to reach 80% generic penetration by the end of fiscal year 2020. The new business venture with Takeda reaffirms our long standing commitment to Japanese patients and delivers on Teva’s strategy of increasing our presence in key emerging markets to position Teva for long-term sustainable growth.”