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No. 365, February 2000

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American Companies in Japan


CHEMICALS

Two midsize U.S. drug companies formed development and marketing alliances with TAISHO PHARMACEUTICAL CO., LTD., also a second-tier player in the world market. For starters, MILLENNIUM PHARMACEUTICALS, INC. is licensing a treatment for chronic asthma to its new partner. Taisho Pharmaceutical will have exclusive rights in Asia and Europe to LDP-977, which belongs to a class of asthma therapies known as 5- Lipoxygenase inhibitors because they block the production of asthma-causing leukotrienes. Cambridge, Massachusetts-based Millennium will have rights elsewhere. The Japanese company will cover all R&D costs associated with commercializing LDP-977 in Asia and two-thirds of the same expenses for the United States and Europe. It also will pay a licensing fee of undisclosed size and make R&D milestone payments. On commercialization and marketing approval, Millennium will manufacture and supply the product to Taisho Pharmaceutical. LDP-977 is in Phase IIa clinical trials.

The other company partnering with TAISHO PHARMACEUTICAL CO., LTD. is NEUROCRINE BIOSCIENCES, INC., which gave the Japanese firm an exclusive option for Asian and European commercialization rights to its altered peptide ligand for the treatment of insulin-dependent diabetes mellitus, or Type I diabetes. The San Diego, California company and Taisho Pharmaceutical will coordinate the worldwide development of NBI-6024 in a collaboration that could be worth approximately $45 million to Neurocrine Biosciences. That amount includes licensing and option fees, payments for certain development and regulatory milestones and half of all development costs. Taisho Pharmaceutical also will pay royalties on sales in Asia and Europe. Phase I clinical testing of NBI-6024 is expected to be completed in the first half of 2000.

SNOW BRAND MILK PRODUCTS CO., LTD. will begin sales March 1 of five kinds of chewable vitamins that it codeveloped with REXALL SUNDOWN, INC. (see Japan-U.S. Business Report No. 363, December 1999, p. 16). The big Boca Raton, Florida nutritional supplement supplier is making a multivitamin, a vitamin C tablet, a vitamin B mix, a vitamin A, C and E combination and a beta-carotene supplement for sale under the Body Navi brand. Snow Brand will market the vitamins, which will cost $8.60 for a month's supply, through the channels it uses for infant formula. Rexall Sundown expects to develop other nutritional supplements with Snow Brand.

In time, CARGILL DOW POLYMERS LLC estimates, exports to Japan could represent 30 percent of the sales of its revolutionary NatureWorks polylactide polymers. Suitable for use in fibers, plastic packaging and other products down the road, PLA polymers are made from a renewal resource — corn-derived dextrose — yet they are said to be competitive on both a cost and a performance basis with hydrocarbon-derived fibers and packing materials. Cargill Dow Polymers, equally owned by CARGILL INC. and DOW CHEMICAL CO., already has signed supply arrangements with a KANEBO, LTD. affiliate, KURARAY CO., LTD., MITSUBISHI PLASTICS, INC. and UNITIKA, LTD. In the near term, they could receive PLA polymers from a pilot plant outside Minneapolis that will have the capacity by yearend to make about 8,800 tons of product a year. However, Cargill Dow Polymers just announced plans to build a $300 million, world-scale facility in Blair, Nebraska to produce PLA polymers. Expected to come onstream in late 2001, the plant will be able to turn out approximately 154,000 tons of NatureWorks PLA polymers a year.

An unnamed Japanese company described only as a major supplier of materials for LCD production is the first customer for an antireflective film that SOUTHWALL TECHNOLOGIES INC. developed specifically for use with the high-resolution displays of notebook and desktop computers as well as personal digital assistants. The film will be made at Southwall's Palo Alto, California facility. Initial quantities will be available this quarter. To date, the company has made antireflective film for cathode-ray tubes (see Japan-U.S. Business Report No. 359, August 1999, p. 13).

In a deal designed to build up its business among manufacturers of electrical equipment in Southeast Asia, major thermoset composite molding compounds producer PREMIX, INC. tied up with DAINIPPON INK AND CHEMICALS, INC. The North Kingsville, Ohio firm licensed its molding compound production technology to DIC for use in making thermoset composites for such products as circuit breakers. The Japanese manufacturer, one of the world's biggest producers of unsaturated polyesters, will launch production based on Premix's technology in April at an Osaka factory. DIC also is weighing production at its plants in China as well as in Thailand and elsewhere in Southeast Asia. As part of their agreement, Premix and its new partner will review other opportunities to work together on thermoset composites, both on the technical side and in the applications areas.

An exchange rate of ¥105=$1.00 was used in this report.aaaaaa

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