Dr Reddy’s Laboratories (DRL) and Japan-based Fujifilm Corporation have decided to terminate their memorandum of understanding (MoU) to enter into an exclusive partnership in the generic drugs business for the Japanese market and to establish a joint venture in Japan.
The two companies had signed the MoU on July 28, 2011, and had conducted detailed studies on the establishment of a joint venture for developing and manufacturing generic drugs in Japan. As Fujifilm realigns its long-term growth strategy for the pharmaceutical business, both companies have arrived at an agreement to terminate the MoU, Dr Reddy’s said on Monday.
However, both the companies will continue to explore partnership or alliance opportunities in other pharmaceutical businesses, such as API (active pharmaceutical ingredients) development and manufacturing, contract research and development and manufacturing, and the development and marketing of super-generics.
“Unfortunately, we will not be able to partner with Fujifilm specifically for the generic formulations business in Japan. However, I want to reinforce our commitment towards a planned entry into Japan to bring affordable and innovative drugs to more patients worldwide,” GV Prasad, chairman and CEO, Dr Reddy’s said. Its shares on the BSE closed at R2,113.10 on Monday, up marginally by 0.98%.
Commeting on the development, Sarabjit Kour Nangra, VP-Research (pharma), Angel Broking, said, ?Though both the companies have parted ways, the Japanese market cannot be ignored for too long. The company may look at other options such as going solo or having a partnership with some other company.”
Takatoshi Ishikawa, Fujifilm’s corporate vice-president and general manager of its pharmaceutical products division said, ?In the long term, we will be focusing more on priority fields such as new cancer drugs, more value-added super generic and bio-related business by using our core technologies. Meanwhile, we will continue our future collaboration with Dr Reddy?s in other fields.?
Indian companies, such as Lupin Pharma, Orchid Pharma, Dr Reddy’s Laboratories, Aurobindo Pharma, Neuland Labs, Zydus Cadilla, among others, have forayed into the Japanese market, which was earlier closed for generic companies. “The Japan market is hyper-valued because it is the second- largest generics market in the world with the government easing some regulations for generic players. This has opened up gates for Indian companies despite its conservative regulatory policies,” a source said from a company which has a significant presence in Japan. ?For Indian generic players to be part of Japan, there has to be scale as the market is very competitive.?
