Sanofi-Aventis has moved into Japan, upping its stake in the global generic drug market. The French biopharmaceutical company is entering into a joint venture with top generics company Nichi-Iko Pharmaceutical to develop a generic business in Japan.

The new venture, called Sanofi-aventis Nichi-Iko K.K., will be 51 percent owned by Sanofi and 49 percent owned by Nichi-Iko. Sanofi will also acquire 1.5 million shares of Nichi-Iko, taking a 4.7 percent equity stake in the company. Nichi-Iko is the leader and fastest growing generics company in Japan, with 2009 sales reaching $603 million.

The joint venture will be able to take advantage of Nichi-Iko's expertise in manufacturing, development, and distribution of generics in Japan and Sanofi-Aventis' resources and global portfolio of generics.

The deal allows Sanofi-Aventis to develop a strong presence in the fast-growing generic market in Japan. Japan is the world's second largest pharmaceutical market, with annual sales of $97 billion, with about 8 percent of that amount generated from prescription drug sales or generics, which account for 20 percent of all sales by volume. The Japanese government is promoting the use of generics with the objective to reach more than 30 percent of the total pharmaceutical market in volume by 2012.

The Sanofi-Nichi-Iko alliance is another example of Sanofi’s push to be a major player in the fast-growing branded generics market, which started with its 2008 acquisition of Czech generic drugmaker Zentiva for $2,600.