INTERVIEW-UPDATE 1-Sawai eyes bigger Japan generics market share

* Aims to lift Japan market share to above 18.7 pct

* Sees full-fledged competition with global rivals in 5 yrs

* Has no plan to enter offshore markets (Adds details)

OSAKA, Japan, Nov 17 - Japan's No. 1 generic drug maker, Sawai Pharmaceutical, aims to lift its share of the growing domestic market despite competition from bigger foreign players and a headwind from government price plans, its president said on Tuesday.

Japan's generic drug industry could be facing big changes as Israel's Teva Pharmaceutical Industries, the world's biggest maker of generics, plans to start sales here next year via a joint venture, targeting a market share of 10 percent by 2015.

In addition, Japan's new, reformist government plans to cut prices for brand-name drugs, which reduces the price advantage of generic drugs.

"Neither Teva nor Ranbaxy has a new generic drug to lead its way fully into the Japanese market yet. It would be five years before they stand in our way," Sawai President Mitsuo Sawai told Reuters in an interview, referring to Ranbaxy Laboratories. Japan's Daiichi Sankyo bought a majority stake in Indian generics maker Ranbaxy last year, though the two have not laid out plans to start selling Ranbaxy's products in Japan.

Sawai said his company aims to lift its Japan market share above the 18.7 percent it has been targeting for the year to March 2012 in its midterm business plan from 14.7 percent seen this business year.

Teva has said it hopes for annual revenue of 100 billion yen ($1.12 billion) in Japan by 2015, only a year after Sawai aims to reach that level. Sawai is projecting less than half that revenue for this business year.

"Teva may be a big player abroad, but no doctor here has heard of it. We have far better recognition, and we will capitalise on that to have leading hospitals use our products and leverage our brand before they make a full entry into the market," he said.

Sawai said the company sees the Japanese generic drug market expanding by 37 percent to 705 billion yen by the year to March 2012 from the estimated amount this business year.

Teva has projected that the market will grow to 1 trillion yen by 2015.

Sawai, which operates only in Japan, has no plan to extend its reach abroad, in contrast to fellow Japanese generic drug maker Aska Pharmaceutical, which plans to start selling its drugs in Europe in 2012.

Aska, in which Japan's top drug maker Takeda Pharmaceutical holds a stake of less than 10 percent, would be the first Japanese generics maker to go abroad, according to local media.

"In offshore markets where competition is severe, prices are at roughly one third the level of Japanese prices. It's better to focus on Japan for the sake of profitability," Sawai said.

Sawai aims to lift its operating profit margin to 16 percent by the year to March 2012 from an estimated 14 percent this year.

Before the interview, Sawai shares closed down 0.8 percent at 4,760 yen, underperforming the Nikkei stock average, which lost 0.6 percent.