IB Times
Sun Pharma sells its two US-based plants to Frontida BioPharm. Pictured: An employee speaks on phone as he walks out of research and development centre of Sun Pharmaceutical Industries Ltd in Mumbai April 7, 2014.Reuters file

Indian drug major Sun Pharmaceuticals said Tuesday it has entered the Japanese market by acquiring 14 prescription brands from Swiss drug maker Novartis for $293 million.

Sun Pharma informed the Bombay Stock Exchange(BSE) in a filing that according to the agreements signed by both the parties, a wholly-owned subsidiary of Sun Pharma will acquire the portfolio consisting of 14 established prescription brands from Novartis for a cash consideration of $293 million.

The size of the Japanese pharmaceutical market was estimated at $73 billion, accounting for over 7 percent of the $1 trillion global pharmaceutical market, according to the December 2015 IMS Data. Japan is reportedly the world's second-largest drug market.

These 14 brands have combined annual revenue of nearly $160 million and they address the medical conditions across various therapeutic areas, the filing said.

Novartis would continue to distribute these brands in Japan for a certain period, pending transfer of all marketing authorisations to Sun Pharma's subsidiary.

The acquired brands will be marketed by a reliable and established local marketing partner under the Sun Pharma label. The local marketing partner will also be responsible for distribution of the brands, according to the statement.

"Japan is a market of strategic interest for us. This acquisition marks Sun Pharma's foray into the Japanese prescription market and provides us an opportunity to build a larger product portfolio in the future," Dilip Shanghvi, managing director of Sun Pharma, said.

The shares of Sun Pharma jumped by Rs 15 or 1.86 percent at Rs 809 from Rs 794 at its previous close at 10.45 a.m. on the BSE.

Lupin and Biocon are the other two Indian pharma companies that have forayed into the Japan Pharma market.

Japan's ageing population and rising healthcare costs have prompted the Japanese government to allow the entry of generic drug makers in its pharma market, according to the Mint.

"Japan's rapidly ageing population — just over a quarter of the population was aged 65+ in 2013, up from 12 percent in 1990, and accounting for over 50 percent of the country's healthcare costs—is expected to drive demand for pharmaceuticals in 2014-2018," according to a Deloitte report, the Mint reported.

[1 lakh = 100,000 | 1 crore = 10 million | 100 crore = 1 billion]