Sanofi-Aventis has confirmed this morning that it is setting up a joint venture with Nichi-Iko Pharmaceutical Co “in order to develop a generic business in Japan”.

The French drugmaker will have a 51% stake in the JV and has also acquired over 1.5 million shares in Nichi-Iko, giving it a stake of just under 4.7%. Sanofi described the Toyama-headquartered group is “the leader and fastest growing generics company in Japan”. Its sales last year reached 54.80 billion yen, about 460 million euros.

As a first step, the JV will take over the marketing and distribution rights in Japan for the anti-insomnia agent Amoban (zopiclone), sales of which were 5.1 billion yen in 2009. Olivier Charmeil, head of Sanofi’s operations in Asia Pacific and Japan, said the generics market is expected to further expand given “the government's stated objective of increasing generic penetration”.

Japan is the world’s second largest pharmaceutical market, with annual sales of 8.85 trillion yen, around 74 billion euros. Some 20% (in sales volume) are generics and the Japanese government is promoting the use of copycat versions with the objective of reaching more than 30% by 2012.

Sanofi is no newcomer to Japan, where it employs 3,000 employees, and the firm notes that its Kawagoe facility, based in Saitama,”has been supplying drugs to Japanese patients for more than 40 years”. Sales in the country last year reached 1.8 billion euros, up 10.7% on the figure in 2008.