Japanese generics firm Towa has seen its profits slashed as increased expenses stemming from its acquisition of Sunsho Pharmaceutical decimated its bottom line in Q3.

Towa Pharmaceutical has struck a deal to acquire fellow Japanese firm Sunsho Pharmaceutical in a move that Towa says will help it to diversify by developing value-added products.

Towa has issued a minor upward revision to its full-year guidance after its domestic business delivered higher than expected sales and profit growth during H1, but uncertainty in the Japanese generics market and concerns over the firm’s overseas units have led some analysts to raise questions.

Japanese player Towa Pharmaceutical joined Sawai in capitalizing on Nichi-Iko’s misery by taking market share from its rival, as it ran factories at full capacity and plotted for further expansion.