Dive Brief:
- 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.
Dive Insight:
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.