Ranbaxy Laboratories Limited (Ranbaxy) is raising its equity stake in Nihon Pharmaceutical Industry Co., Ltd. (NPI), a joint venture between Ranbaxy and Nippon Chemiphar Co. Ltd. (NC), from the present 10% to 50%. With this enhancement, NPI will become a 50:50 joint venture between Ranbaxy and NC. Ranbaxy and NC have signed the agreement on November 11, 2005.
Commenting on the development, Dr. Brian Tempest, CEO and managing director, Ranbaxy said, "Ranbaxy's increase in the shareholding of the joint venture reinforces the company's strong commitment to the Japanese market. Further, the new structure recognises the equal commitment of both partners and their intent to grow the generics business in Japan, in a collaborative manner."
On the occasion, Mr. Malvinder Mohan Singh, president, pharmaceuticals and executive director, Ranbaxy, stated, "Ranbaxy and NPI have had a successful relationship. This logical move by Ranbaxy to enhance its stake flows from the increased comfort level of both partners and their resolve to take the business to higher levels of performance. The 50:50 joint venture exemplifies the synergy and the strengths, which the respective companies bring to the joint venture."
Kazushiro Yamaguchi, president and CEO of NC sated, "In Japanese ethical pharmaceutical industry, NC is one of the first companies to recognise the importance of generics and to make the generic business a pillar of the company's business. NC intends to be a leading company in Japan's generics market. Thus it is crucial for our business strategy that we strengthen the relationship with Ranbaxy, a partnership we began three years ago."
Both partners have a complementary role to play. NC provides the regulatory know how and in-depth knowledge of the Japanese market, while Ranbaxy brings to the table, its diversified and rich generics product pipeline along with its astute understanding of the global generics business.
Ranbaxy entered the Japanese market in the year 2002 through a strategic alliance with a mid sized research pharmaceutical company, Nippon Chemiphar Co., Ltd. (NC) of Japan subsequently acquired a 10% equity stake in its generic subsidiary Nihon Pharmaceutical Industry Co., Ltd. (NPI).
In the last three years, the techno commercial teams of Ranbaxy, NPI & NC have worked closely, leading to the successful launch of their first co-developed product Vogseal 0.2mg and 0.3mg tablets (Generic-Voglibose- used for the treatment of diabetes) in Japan in July'05. The Vogseal brand of generic Voglibose tablets launched by the joint venture has already emerged as a brand leader amidst stiff generic competition. Ranbaxy has now stepped up the momentum of its product filings in Japan through the joint venture (NPI), to capitalise on the emerging opportunities in the Japanese generic space.
Japan, the world's second largest pharma market (about US$65 billion) currently has a relatively underdeveloped generics market (about US$4 billion amounting to only 6 % by value), as compared to other similar advanced pharmaceutical markets of the world. This underscores the huge potential in Japan for generics. The Japanese generics market is now showing distinct buoyancy and is opening up as government will and realisation drives forward the desire and commitment to reduce the country's expenditure on drugs and medication.