The strong mutual complementaries between India and Japan are driving the trade and potential sectors of trade and investment including chemicals and pharmaceuticals among a wide range of areas. The Confederation of Indian Industries (CII) report 2012 titled "India-Japan: A Growing Strategic Relationship" has predicted that the two countries would achieve a trade target of $25 billion by 2014.
The winning strategy Indian companies have adopted is to have an in-country experience first, partnering with a domestic company in order to build on established relationships and partners.
Since 2010 onwards, there is a gradual improvement of India exports to the Japanese markets. India's export to Japan is growing at 78 per cent with US$ 144 million during the year 2011-12.
While India's pharmaceutical sector is poised to grow from US$ 21.7 billion currently, to US$ 36.7 billion by 2015, Japanese market is estimated to be around US$ 120 billion.
A delegation of pharmaceutical firms from Japan' recently indicated that Japanese companies are keen to collaborate with Indian pharma companies in trade and technology development.
Japanese pharma companies are keen to collaborate with Indian pharma companies in trade and technology development, said Yasuhiko Shioi, president, Kokando Co. Ltd., leader of the Japanese pharmaceutical delegation to India.
Addressing a Ficci meeting with pharmaceutical companies of Toyama Prefectures,Shioi said that Indian and Japanese companies could also undertake joint market research and product development for world market as also jointly develop new technologies.
While making a presentation on ‘Overview of Indian Pharmaceutical Industry’, Daara Patel, secretary general, Indian Drug Manufacturers’ Association (IDMA), pointed out that India is eager to support Japan by providing affordable quality generics with assured safety and efficacy. India’s Commerce Ministry has set up ‘India-Japan Pharma Alliance’ (IJPA) in Japan under the aegis of Pharmexcil, which was co-founded by IDMA. The increase in generic dispensing is about 20 per cent on a year over year basis.
Atul Shunglu, Assistant Secretary General, Ficci, assured the delegation that the synergy between large Indian consumer market and technology and manufacturing strength from Toyama can bring a win-win situation.
Last April the Japan Research Institute (JRI) signed a MoU with Ficci, for the promotion of exchange between Japan and India in the field of healthcare.
JRI believes that, for Japanese manufacturers of pharmaceuticals and medical equipment and healthcare-related companies with an interest in India, cooperation with the Ficci will not only facilitate access to information on India but, by promoting the conversion of local systems to Japanese specifications, will also have the benefits of promoting market participation and commercialization, and of strengthening Japan’s competitiveness.
Especially the last five years have witnessed many collaborative deals between bioscience organizations in India and Japan. The adoption of generic friendly policies by the Japanese government has fuelled considerable interest in the business and bilateral relations between the two nations, which is evident from the confidence that exudes from the various organizations based in the two countries.
Last October the Tata group-promoted Advinus Pharma entered into a joint drug discovery deal with Japanese pharma giant Takeda Pharma, indicating multinational companies' growing interest in Indian drug research, and holding out hope for startup firms engaged in research.
While Takeda will receive worldwide commercial rights for the drug candidates emerging from this alliance, Advinus will receive $36 million worth guaranteed research funding, $ nine million in milestones leading to candidate selection, and is also eligible to receive future clinical and regulatory milestone payments of up to $ 45 million-per-product, plus royalties on product sales worldwide.
Dr Reddy's Laboratories (DRL) had formed a joint venture with Fuji film in June 2012, to develop, manufacture and promote generic drugs in Japan.
The venture has 51 per cent stake owned by Fujifilm and 49 per cent by Dr Reddy's, and intends to launch its first products in Japan in the next three-to-four years. Dr Reddy's will develop, manufacture and promote competitive and high quality generic drugs utilizing both Fujifilm's advanced quality control technologies and DRL's expertise in cost competitive production technologies for active pharmaceutical ingredients and formulations.
In fact, the mutual bioscience relationship between the two nations has come a long way since the establishment of the first ever Undo-Japanese joint venture firm, Sanzyme in 1969. Head-quartered in Hyderabad, the company expanded its activities and evolved as the manufacturer of fermentation and biotechnology products in the country.
The Indian generic players such as Lupin, Ranbaxy and Cadila Healthcare have made inroads with the Japanese market. Ranbaxy (now wholly-owned by Daiichi Sankyo) was one of the first companies to enter Japan in 2002 by acquiring 50 per cent stake in Nihon Pharmaceutical Industry. Ranbaxy and Daiichi in 2010 set up Daiichi Sankyo Espha, to sell generics as well as off-patent branded drugs in Japan.
The Mumbai-based pharmaceutical firm Lupin acquired Kyowa Pharmaceutical in 2007.Initially
Lupin had partnered Kyowa to access the Japanese market. As per the earlier agreement, the Japanese drug maker conducted required studies and obtained regulatory approval for drugs that Lupin had developed and manufactured. Lupin was among the first domestic company to export medicines to Japan. Ranbaxy, Dishman and Zydus Cadila followed, establishing presence through partnerships and acquisitions.
Cadila Healthcare too has presence in the Japanese market since 2007 after it acquired Nippon Universal Pharma. The company is pinning big hopes on the Japanese generics market. The country, which currently has a one percent share in Cadila's overall revenues, is all set to become a key market in the coming years. It already has around 20 products in the Japanese market including three recent launches. Zydus Cadila had set up Zydus Pharma Inc in 2006 to spearhead its foray into the generics market of Japan.
Recently Elder Pharmaceuticals, a Rs.1,325 crore plus Mumbai based pharma company, agreed to establish a joint venture company (JVC) with Japan’s cosmetic giant KOSÉ Corporation with the provisional name of KOSÉ Elder (India) Private Limited.
Both the companies have finalized terms and conditions of the joint venture contract. The agreement stipulates that KOSE will focus on the Indian market through the JVC for manufacturing and selling cosmetics in India. KOSE will hold 60 per cent and Elder to hold 40 per cent in the proposed JV.
KOSE’s key means of advancing into overseas markets up to now has been to export from Japan only those of its existing brand products that matched the requirements of the target country’s market, but in India, where culture and tastes are very different, they have considered it essential to undertake strategic and business planning tailored to the region, and are proceeding with investigations through agreements with local enterprises that are familiar with the markets. Very recently the Hyderabad based Neuland Laboratories Ltd., a Rs.440 crore plus pharmaceutical manufacturer providing active pharmaceutical ingredients (APIs), complex intermediates and contract manufacturing services to customers located in 85 countries, has entered a manufacturing collaboration with Tokyo-based API Corporation (APIC), a healthcare unit of Mitsubishi Chemical Holdings Group that produces APIs, intermediates and investigational new drugs, along with fine chemicals and reagents.
Under the terms of the agreement, API Corporation is making an investment in Neuland’s facilities that will provide APIC with dedicated capacity for meeting the needs of its customers. The facilities will be operated by Neuland employees and the two companies will share oversight and management responsibilities.
Neuland also intends to continue to independently expand its already-sizeable business in Japan, building on its significant customer base for both generic API manufacturing and contract manufacturing of APIs and intermediates.
Neuland Labs has been at the forefront of manufacturing APIs through its cGMP manufacturing facilities, working with customers in 85 countries. Neuland Labs has developed more than 300 processes and 60 APIs, and it has filed more than 40 US drug master files (DMFs), 10 EU CEPs and a total of more than 400 DMFs worldwide.