JERUSALEM Israel's Teva Pharmaceutical Industries has entered into a joint venture with Handok Pharmaceuticals, aiming to gain a foothold in the $14 billion Korean market.
The agreement ends months of speculation that Teva was interested in making an acquisition in South Korea, where the Israeli company noted healthcare spending is expected to reach as much as 9 percent of gross domestic product by 2015.
The move comes after Jeremy Levin, new chief executive of the world's largest generic drug company, last week set out a strategic plan, vowing to reshape Teva into "the most indispensable medicines company in the world" and provide significant value to its shareholders.
Levin said Teva's growth centered on five areas: accelerating growth platforms, extending its global presence, engaging in strategic business development, protecting and expanding its core franchises and reduce its core cost base.
"Our business venture with Handok is a strategic fit for Teva in these growth areas and aligns with our commitment to address global medical, societal and consumer needs," Levin told Reuters on Monday.
"Teva recognizes the importance of growing in east Asia, both for our shareholders and the patients who will benefit from having access to our medicines," Levin said.
Teva shares, which have fallen sharply since the strategy was announced on December 11, were down 0.5 percent at 144.8 shekels by 0955 GMT, their lowest in 12 months.
Teva will hold 51 percent and Handok will own the rest, in a venture which will be Teva's first in east Asia outside Japan and which is due to start operations in the next few months. Financial details were not disclosed.
Under terms of the deal, Teva will be responsible for manufacturing and supplying medicines, while Handok will handle sales and marketing, distribution and regulatory affairs.
Teva said the new company's plans included selling its branded multiple sclerosis treatment Copaxone, which has started to face competition globally.
(Editing by David Holmes)