Future Events

July 10-12, 2002BioExpo 2002 and Interphex

are two large trade exhibitions taking place simultaneously and side by side on July 10 (Wed) - July 12 (Fri) in Tokyo. If you need and coordination to arrange a trip, share a booth, or such, please ask me, or mail to the organizers at Reed Expo, ipj@reedexpo.co.jp.

Nov. 26, 2001French Biotech Seminar

A delegation of executives from the French biotech cluster of Essonne near Paris (Genopole) visits Japan to build new links and business. A networking seminar takes place on Monday afternoon. The program is available as a separate textfile in Japanese or English. The talks will also be English and Japanese (simultaneous translation).

News

010917NS Takeda implements speedy strategic decision making

Key: Business

Although Japanese pharmaceutical companies are small compared to their global competitors, is generally said that they have two strong points over their global competitors: One is a large war chest of money in the bank, waiting to be invested into new technologies. The second is the personal/family ownership of companies, which lends it self to speedy, undisputed decision making without the need to consult shareholders.
In order to profit from this second strength, i.e. to implement speedy decision making in a top-down manner, Taisho Pharmaceuticals has set up a "general strategy council", headed by company's president and owner, Kunio Takeda (武田国男), along with Masahiko Fujino (藤野政彦), chairman of the board, and vice president Hideyuki Nagasawa (長沢秀行). The council will convene weekly to identify focal points of R&D and investment, to decide on outside cooperations and to oversee intellectual property strategy.
Previously, general strategy had emerged from discussion between department heads. Although Takeda has seen record results due to its well selling diabetes and ulcer drugs, its pipline is said to be thin beyond 2005. The new council aims to tackle this problem by focussing the company.

010917NS Taisho and Tanabe merge to become No. 3

Key: Perspectives Finance Business

Taisho Pharmaceuticals and Tanabe Pharmaceuticals announced to merge their operation by setting up a holding company, Taisho Tanabe Pharma Group, in April 2002. By merging, the companies hope to remain competitive in the post genome era which requires increasingly large R&E budgets. The merger is seen as a reaction to large global mergers (Pfyzer with Warner Lambert and Glaxo with Smithkline, most recently), and to the push of global players into the Japanese market. (Alan Boots of Pfyzer has declared his intention to become No.1 or 2 in Japan by 2004.) Similarly, in Japan, Welfide will merge with Mitsubishi Tokyo Pharma on October 1st to create the 9th largest pharmaceutical company in the country.

Taisho Tanabe will be headed by Taisho's president, Akashi Uehara (上原明), and the board will be chaired by Tanabe's president, Toshio Tanaka (田中登於). The board of trustees will be made up of an equal number of members from Taisho and Tanabe.
Tanabe is a company of long standing. It was founded in 1876 in Osaka. Tanabe's market capitalization is 3.4exp10 Yen, annual sales are 2exp11 Yen, net profits are 3exp9 Yen (March 2001 figures) and it employs 5000 people. Core business are its cardiovascular and respiratory drugs.
Taisho, located in Toyoshima, a part of Tokyo, was founded in 1912, has a market cap. of 3exp10Yen, annual sales of 2.7exp11 Yen, net profits of 3exp10 Yen and also employs about 5000 people. It is the national market leader of over the counter drugs, with its energy drinks and hair growth lotion selling best.
Consequently, the new company will feature two main divisions, clinical therapeutics (focusing on the circulatory system) and and non-prescription drugs.

In a follow-up feature on Sept. 25th, Nikkei Shinbun examines the backroud of the merger.
Taisho's house bank has long been Sumitomo bank through a personal friendship between Ueda and Shozo Koborita (故堀田庄三), a former director of Sumitomo. Tanabe has been close to Sanwa Bank. It is therefore of great surprise that the merger was masterminded by Tokyo Mitsubishi Bank, the same bank that initiated the Mitsubishi Pharma - Welfide merger. In fact, many analysts believe that Tokyo Mitsubishi Bank may have larger plans: The Taisho-Tanabe merger produces only little synergy as their combined prescription drug sales remain at 2.3exp11 Yen, far behind Takeda. Also, the number of new products in Taisho-Tanabe's pipeline is said to be unimpressive. Another merger with Mitsubushi Tokyo/Welfide, however, would bring pharmeceuical sales near Takeda and create a national pharmeceutical powerhouse.

Sales ranking of Japanese pharmaceutical companies (1exp11 Yen, March 2001)

Rank	Company	Yearly Sales	Remark
1	Takeda	9.634
2	Sankyo	5.450
	Taisho Tanabe	4.683	to be established
3	Yamanouchi	4.579
4	Shinogi	4.126
5	Ezai	3.617
6	Daiichi	3.170
7	Fujisawa	2.975
8	Taisho	2.734	to merge
9	Chugai	2.030
10	Tanabe	1.940	to merge

Recent restructuring of the Japanese pharmaceutical market

Month	Deal
Apr. 1998	Yoshitomi Pharma and Green Cross merge and later rename themselves Welfide
Nov. 1998	Japan Tobacco takes Torii Pharma under its umbrella
Oct. 1999	Mitsubishi Chemicals absorbs Tokyo Tanabe Pharma and sets up its pharmaceutical division as an independant company, Mitsubishi Tokyo Pharmaceuticals
Dec. 1999	Ajinomoto buys Aventis' (at the time Hoechst Marion Roussel) transfusion business and launches Ajinomoto Pharma.
Jan. 2000	Schering buys Mitsui Pharmaceutical Industries
Feb. 2000	In a take over bit, Boehringer Ingelheim takes SS Pharma under its umbrella
June 2000	UCB of Belgium acquires Fuji Rebio's pharmaceutical division
June 2001	Systemex announces to transform International Reagents into a daughter company
Oct. 2001	Welfide and Mitsubishi Tokyo Pharma merge to create Mitsubishi Welpharma
April 2002	Taisho and Tanabe will join operations under a common holding

010804PI PostGenome Institute: "PCR for Proteins"

Key: R&D Products

Fukashi Murai, CEO of PostGenome Institute Inc., gave a presentation on his company's technology of protein synthesis with purified proteins at a semiar organized by BLS. The technology, published by Takuya Ueda's group (University of Tokyo) in this month's issue of Nature Biotechnology, uses ribosomes plus the entire translation machinery of E.Coli as recombinant, His-tagged proteins, tRNAs, amino acids etc. to synthesize proteins at the hundred ug/ml scale. Addition of RNA polymerase allows proteins to be synthesized from a DNA vector using the T7 promoter. The reaction product is subjected to ultrafiltration to remove ribosomes and run on a nickel column which retains the His-tagged proteins, yielding purified protein in less than two hours time.
Murai hopes that reconstituted protein synthesis will become a central tool in structural and molecular biology just as reconstituted DNA synthesis in the form of PCR has become a standard technique. He is presently looking for licensees and partners overseas to develop and market the technology.

010726NS Genome Databases Gain Popularity

Key: R&D Genome IT

Kyowa Hakko has signed up to use Compugene's genome analysis database, which is based on pubic domain sequence data, while Yamanouchi signed a five year contract with Celera. Ezai, Sumitomo Pharma and Sankyo gained database access with Incyte Genomics - Sankyo on top of a previous agreement with Gene Logic, Maryland. Evidently, Japanese pharmaceutical companies are step by step turning to genomics tools to speed up their research. Celera has recently established a Japanese office, and Incyte did so some time ago already, to take advantage of this trend.

010719NS Celera Japan to provide Drug Targets

Key: R&D Genome IT

Celera Genomics announced to open office in Japan to run its Asia operation. In addition to selling access to its genome and SNP database, Celera Japan will offer added value through research cooperation for drug target identification. Celera sees demand for such service because Japanese pharmaceutical companies do not have the size and budget to match the genome discovery efforts of their Western counterparts.
Celera Japan will be headed by Richard H. Lussier, director of Applied Biosystems Japan and will have a staff of 4 people initially. It is possible that Celera's move may prompt its competitors in Japan, Takara and Hitachi, to revise their genome discovery support business.

010710 University Technology Transfer is Accelerating

Hideo Namiki, director of Waseda University's technology licencing office (TLO), announced the first licensing deal in the 10exp8 yen range. Subject of the agreement is a cobalt-nickel-iron ligation which allows higher density magnetic recordings, to be used in hard disk drives.
Technology licensing fees had been stuck in the 10exp7 Yen range. For the Waseda TLO, founded in April 2000 as a relative late comer, it was the 10th licensing deal.
Waseda sees its TLO as the main pillar of a wider strategy to start up high-tech companies and thus capitalize from the technology developed in its laboratories in a time where tuition fees are predicted to decline. A high tech business incubator is being built on campus, inquiries for research projects and cooperations are welcome form outside companies (the above-mentioned license came out of a research cooperation with NEC), and an effort is made to raise the venture spirit in faculty and students alike. Waseda's ambition is to create 100 spin-out companies by 2001, one tenth of the 1000 university ventures the Japanese government (METI) envisions to raise and support with 4exp10Yen over the same period.

010405OS Myriad, Oracle, Hitachi: Proteome Venture

Key: R&D Genome IT

REDWOOD SHORES, Calif. (AP) - Computer software giant Oracle Corp. announced Wednesday it is forming an alliance with two biotechnology companies to map out human proteins and how they interact. The venture with Salt Lake City-based Myriad Genetics Inc. and Tokyo-based-Hitachi Ltd. - to be called Myriad Proteomics - hopes to complete its catalog by 2004. Myriad Genetics is putting up $82 million worth of technology and will own 50% of the joint venture. The other half interest will be split among Oracle, Hitachi and Switzerland-based Friedli Corporate Finance, which are providing a collective $85 million in cash and $18 million in additional technology. Redwood Shores-based Oracle previously has provided computing tools for biotech research - most notably for Celera Genomics Group's human genome project - but this is the first time the software giant has put money into the sector.

010326NS Blood Vessel Regeneration

Key: R&D

Under the leadership of Hiroaki Matsuhara, a team of researchers from Kansai Medical University and Kurume Medical University has successfully concluded clinical trials of a novel therapy for blood vessel regeneration.
11 patients who were suffering from obstructive arteriosklerosis and insufficient blood supply in the foot as a consequence of diabetes or hyperlipidemia were treated with autotransplanted mesothelial stem cells. The cells were obtained from 500ml of bone marrow taken from the patiient's hip region. Stem cells were isolated, treated with Hepatocyte Growth Factor (HGF) and injeted into the patient's calf muscle. New blood vessles grown from the stem cells improved blood flow in the foot 2.3fold on average.
An estimated 100 000 patients per year in Japan are surgically amputated a limb due to obstructive arteriosklerosis. The researchers have submitted the treatment to the Ministry of Health and Welfare for approval of coverage by the national health insurance. Furthermore, clinical trials for treatment of myocardial infarction are under way. An different group of researchers at Osaka University will start HGF gene therapy treatment for obstructive arteriosklerosis in the near future.

010200NS Fuji Focusing on Hormones

Key: Products R&D

Fuji Pharmaceuticals, a major generic drug manufacturer located in Toyama, is building a new plant to manufacture injectible hormone drugs. The plant will double Fuji's capacity for to treat infertility and menopause-related symptoms, currently 1.6exp7 doses a year. Fuji's previous aim to expand its oinment and pill business has run into cheap competition, and such products will be increasingly outsourced to Thai generic drug manufacturers. Hormone drugs, Fuji's strong point (70% of sales), are more difficult for competitors to produce. Fuji will increase its R&E budget for next year by 50% to 4.3exp8 Yen in an effort to develop new gynecological drugs.

010129NB.7 Biogen Establishes Japanese Branch

Key: Asia

Biogen, one of the most successful US biotech companies with 8exp8 US$ sales from 4 drugs in 1999 (3exp8 US$ pretax profits), is completing its tricontinental product development plans by establishing its Japanese branch. As head of its Japan and Asia operations, Biogen could recruit a director from Mitsui Trade, Toshio Nakata. Biogen Japan will conduct clinical development of Biogen's drugs. As Interferon beta, Biogen's blockbuster drug, has already been licensed to Genzyme Japan for clinical development, Biogen Japan's first project may likely be AMEVIVE, an inhibitory antobody agains CD2, an immune signalling receptor on T cells. AMEVIVE is presently in stage 3 clinical trials in the US and promises autoimmunity treatment directed specifically agains activated T cells.
Biogen presently has 20 candidate drugs in clinical development and hopes to double that number over the next year. One example are humanized monoclonal antibodies agains multiple sklerosis and Cron disease, in cooperation with Elan, an Irish venture which developed the technology platform for antibody humanization.
Adress: Biogen Japan, Tokyo Chiyoda Marunouchi 1-1-3, AIG 9F, tel. 03-5228 5201

010130NS Biotech Seed Fund

key: finance

Takeo Matsumoto, an entrepreneur who previously worked for NOF corporation in R&D as well as licensing, set up a new venture fund to invest into biotech startups. Unusual in Japan is that the fund, Biotech Healthcare Partners(BHP), invests in seed companies before they have a product line. Matsumoto's long experience in the industry enable him to advise his client companies and to get involved in their Management. Matsumoto aims to carry out 15 investments over the next five years. The fund's capital totals 3exp9 yen, 2/3 of which come from New Business Investment Co., an investment bank affiliated with the state-run JDB (Development Bank of Japan, 日本政策投資銀行). The other third was contributed by Orix Capital, Shinko Capital, Kyorin Pharmaceuticals, Sumitomo Pharma, Tokai Medical Products, Japan Tobaco, Mochida Pharmaceuticals, Yasuda Industry Investment, and Tokyo Small Enterprise Investment Promotion (東京中小企業投資育成), which also owns the incubator building in Shibuya that houses BHP.
For DBJ, this is the second time to invest in a venture fund. (The first investment was in an IT venture fund.) It hopes that private investors will follow to inject life into the Japanese biotech VC field which suffers a serious shortage of lead investors who understand the technology and calculate in the long time frame required to market biomedical technology.

010106NS Taisho: Decreased Profits

Key: Perspectives Products Business

Taisho Pharmaceuticals is expecting less profits in the fiscal year ending in March 2001 than the previous year. Taisho's "Lipovitan D" health drink palette saw 4% less sales in pharmacies but a total increase of 2% through new distributors such as convenience stores. "Re-Up", a hair tonic which was a great hit last year, has also slumped. At the same time, Taisho has been boosting R&E expenditure 42% to 33exp9 Yen. The year is expected to end with a 72exp9 Yen operating profit, a 15% decrease, and a net profit of 35exp9 Yen, -32%.
Another company, SS, is expecting a 3% decrease in profits, 11exp9 Yen in total. With vitamin drinks (+9%) and influenza drugs are selling well, SS has invested to establish its brand name and products, increading advertisement expenditure by 13%.

010103NS Toray: Nanotechnology Materials

Key: Perspectives

The US government has made 'nanotechnology', engineering at molecular scale, a strategic priority of research and development. Toray Industries, traditionally a polymer materials company, is setting up a team to do research into materials for nanodevices, such as electrical microfilms and DNA-containing materials, in order to be ready when the potential market will emerge in 5-10 years time. The 20 members of the new research team will be recruited from Toray's medical research center at Kamakura and its electric information materials research center in Otsu (電子情報材料研究所　神奈川県大津市).

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Designed by Armin Rump, April 21, 2000; updated regularly