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No. 364, January 2000

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Japanese Companies in the US


Deciding that operational autonomy might give its worldwide drug delivery technologies business a competitive leg-up, YAMANOUCHI PHARMACEUTICAL CO., LTD. spun out these activities from its SHAKLEE CORP. subsidiary. Palo Alto, California- headquartered YAMANOUCHI PHARMA TECHNOLOGIES, INC., which assumes the work that was done by the Yamanouchi Shaklee Pharma and YS Pharma divisions, will continue to have primary responsibility for the international introduction and commercialization of unique drug delivery systems. In its former incarnation, Yamanouchi Pharma Technologies already had scored with WOWTAB, a quick-dissolving, without- water tablet technology that was licensed in mid-1998 to JOHNSON & JOHNSON- MERCK CONSUMER PRODUCTS CO. for an over-the-counter product, as well as with the OCAS oral controlled-release system and the colon-targeted release system CODES. Shaklee's Norman, Oklahoma solid-dosage manufacturing facility has the capability to manufacture products incorporating all three drug delivery technologies.

In a deal that will help TAKEDA CHEMICAL INDUSTRIES, LTD. gain more U.S. marketing expertise, INTERNEURON PHARMACEUTICALS, INC. licensed exclusive North American commercialization rights to CerAxon (citicoline), a treatment for ischemic stroke, to Japan's top drug company. Takeda Chemical will pay the Lexington, Massachusetts drug development company $73 million in near-term licensing and milestone fees, plus royalties on net sales. Interneuron Pharmaceuticals indicated that a primary reason it went with Takeda Chemical is because that firm is the discoverer of citicoline. TAKEDA PHARMACEUTICALS AMERICA, INC. of New York City will be in charge of commercializing CerAxon, which is nearing the end of Phase III clinical trials. The Food and Drug Administration assigned citicoline fast-track approval status.

ABBOTT LABORATORIES, a major player in the anti-infective market, has gained U.S. marketing rights to Omnicef (cefdinir), a broad-spectrum cephalosporin antibiotic that is the top seller in its class in Japan. FUJISAWA PHARMACEUTICAL CO., LTD., the developer of cefdinir, originally licensed the drug to WARNER-LAMBERT CO. However, Abbott Labs reportedly lobbied hard to add cefdinir to its anti-infective portfolio, which includes the flagship product Biaxin (clarithromycin) and various erythromycin products. Omnicef has been available in the United States since August 1998. Sales in 1999 are estimated at $40 million.

At some point down the road, ABBOTT LABORATORIES could have two other antibiotics in its lineup. In a tie-up with WAKUNAGA PHARMACEUTICAL CO., LTD., the Abbott Park, Illinois company gained exclusive worldwide rights to develop, manufacture and market a pair of broad-spectrum quinolone antibiotics discovered by the Osaka over-the-counter drug firm. The quinolone class of antibiotics is the fastest-growing segment in the international anti-infective market. The two candidates currently are in the preclinical stage of testing for various respiratory and urinary tract infections. Preliminary data on one indicate promising efficacy against several strains of bacteria currently resistant to antibiotics.

FUJISAWA HEALTHCARE, INC. will copromote to American dermatologists two of SMITHKLINE BEECHAM PLC's drugs. They are the antiviral Famvir (famciclovir tablets), which is approved for recurrent genital herpes and herpes zoster, and the topical antibiotic Bactroban (mupirocin cream and ointment). The former is indicated for secondarily infected traumatic skin lesions, while the latter is aimed at impetigo. Fujisawa Healthcare currently markets two dermatology products, Aristocort and Cyclocort. However, the Deerfield, Illinois subsidiary of FUJISAWA PHARMACEUTICAL CO., LTD. is especially optimistic about the sales prospects for its tacrolimus ointment, which is described as the first new drug in more than 40 years to be developed specifically for the treatment of the chronic skin conditions caused by eczema. A new drug application already was filed with the FDA last fall (see Japan-U.S. Business Report No. 361, October 1999, p. 3).

The expansion of its pharmaceutical business prompted JAPAN TOBACCO INC. to rethink its commitment to XenoMouse, a method for generating human-type monoclonal antibodies from mice that are applicable to the treatment of a wide range of drugs. The big cigarette manufacturer had pursued this technology since September 1991 in collaboration with CELL GENESYS, INC. and since 1996 with that Fremont, California company's ABGENIX, INC. subsidiary. As a result of the review, JT agreed to sell its half-interest in development venture XENOTECH, INC. to its partner for $47 million. Abgenix also will pay JT $10 million to relinquish certain XenoMouse option and licensing rights. However, this amount will be offset by the $10 million that the Japanese company pays Abgenix for continued access to some XenoMouse-related technologies. JT estimates that it and its subsidiaries invested more than $40 million in the development of the XenoMouse know- how. Executives said that the company had decided that it would be better off in the long run creating antibody-based products that JT could sell on its own rather than depending on the royalties generated from the licensing of the XenoMouse expertise.

To accelerate the discovery and the development of new treatments for diabetes, FUJISAWA PHARMACEUTICAL CO., LTD. formed a research alliance with GENE LOGIC INC. Their goal is come up with a custom gene expression data base. In simplified terms, the Gaithersburg, Maryland firm will use its proprietary gene expression analysis tools together with AFFYMETRIX, INC.'s GeneChip probe arrays to identify genes that are differentially regulated — in short, more or less active — in people with diabetes than in healthy individuals. Although most details of the agreement were not released, the partners did indicate that Gene Logic would have the right to incorporate information generated from the study in its GeneExpress data base. Gene Logic also is using its expertise to identify drug targets for JAPAN TOBACCO INC. (see Japan-U.S. Business Report No. 353, February 1999, p. 3).

In a similar relationship, TAISHO PHARMACEUTICAL CO., LTD. is collaborating with genomics company QUARK BIOTECH, INC. to pinpoint and analyze genes and pathways involved in kidney diseases. Their hope is to develop drug candidates that will reverse the rising need for dialysis or transplantation. Under the agreement, Taisho Pharmaceutical will have exclusive worldwide rights to commercialize products resulting from the joint investigation in exchange for providing research and development funding and making milestone and royalty payments. QBI will be in a position to comarket commercialized products in North America and Europe. In addition to the arrangement with Taisho Pharmaceutical, the Pleasanton, California firm is using its drug discovery techniques to help FUJISAWA PHARMACEUTICAL CO., LTD. (see Japan-U.S. Business Report No. 356, May 1999, p. 2) and SANKYO CO., LTD. (see Japan-U.S. Business Report No. 361, October 1999, p. 2).

The FDA approved a disinfectant developed by YOSHITOMI FINE CHEMICALS, LTD. for use in paper and paperboard that comes in contact with food, clearing the way for U.S. sales. HERCULES INC. will market the antimicrobial agent, which kills bacteria and mold when added in small amounts to the paper pulp slurry used to make packaging. The subsidiary of YOSHITOMI PHARMACEUTICAL INDUSTRIES, LTD. obviously expects a big market to develop quickly for its product since it is forecasting annual sales of $58.3 million after just two years.

For $400,000, FORTUNE CHEMIDACS CO., LTD. acquired W.R. GRACE & CO.'s metalworking coolants unit. This Chicago business makes Daralube, a synthetic chemical fluid that was developed specifically for marketing in Japan. Some 200 manufacturers there are said to use Daralube in their metal-processing operations, sold on its high-performance lubricating and cooling abilities as well as on its environmentally friendly properties. Now that it owns the business, Tokyo-based Fortune Chemidacs, itself a producer of metalworking fluids, plans to launch U.S. sales of Daralube.

An exchange rate of ¥103=$1.00 was used in this report. aaa

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