- Eisai Co. Ltd. will partner with fellow Japanese pharma Nichi-Iko Pharmaceutical Co. Ltd. in an alliance that hands Nichi-Iko control of Eisai's generics subsidiary while tapping Eisai's manufacturing plant in Vizag, India, for supply of active pharmaceutical ingredient.
- Under the agreement, Eisai will gradually transfer ownership of its generics unit Elmed Eisai Co. Ltd. to Nichi-Iko over the next year. Beginning in October 2018, Eisai will begin co-promotion of Nichi-Iko's products, while Nichi-Iko starts joint marketing of Elmed Eisai medicines.
- In exchange for full ownership of Elmed Eisai, Nichi-Iko will pay Eisai ¥17.1 billion, or roughly $160 million, according to Reuters, citing a document issued by the company in Japanese.
Most of Eisai's revenues in Japan come from branded prescription medicines either developed in house or licensed from other drugmakers. The drugmaker does, however, make a tidy sum from sales there of generics products, earning about $200 million through three quarters of the fiscal year ending March 31, 2018.
In a somewhat convoluted deal, Eisai will slowly transfer ownership of its Elmed subsidiary, sending Nichi-Iko 33.4% of the unit by Oct. 1, 2018 and the remainder by April 1, 2019 — provided unspecified progress is made under the alliance.
From its Vizag plant, Eisai will supply Nichi-Iko with active pharmaceutical ingredient, helping its Japanese peer and now-partner grow its generic business with what the companies characterized as more competitively priced drug product.
Nichi-Iko, founded in 1965, says it eventually aims to secure 20% share of the Japanese generics market. Adding Elmed Eisai will take its current foothold up to 15.8%, according to a presentation from the company.
While the deal is significant for Nichi-Iko, Eisai's broader focus is in the branded pharmaceutical market. Notably, the pharma inked a wide-ranging collaboration deal with Merck & Co. designed to explore pairing Keytruda (pembrolizumab) with Eisai's Lenvima (lenvatinib).
The agreement is potentially worth $5.76 billion to Eisai, although much of that is back-ended into sales and regulatory milestone payments.