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No. 365, February 2000

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American Companies in Japan


PRECISION AND MEDICAL EQUIPMENT

The Japan Defense Agency's Ground Self-Defense Force is purchasing 11 GammaCam gamma-ray imaging systems from AIL SYSTEMS INC. to support emergency response teams in the event of another nuclear accident. Unlike other portable radiation detection devices that must be carried into a potentially dangerous site, the Deer Park, New York manufacturer's product can be operated from distances of up to 1,575 feet. Moreover, the information captured is displayed in real time on a remotely located computer display. ITOCHU CORP. represented AIL in the $5.2 million deal. In the wake of last September's accident at a nuclear fuel processing facility in Ibaraki prefecture, the trader believes that it can sell 100 GammaCams over the next five years to utilities, research institutes, universities and hospitals as well as to nuclear fuel processing plants.

The nuclear accident also has created interest in an alternative to the use of radioactive nuclear isotopes to sterilize medical products. That, in turn, has provided an opening for TITAN CORP., the developer of an electron-beam technology for medical product sterilization as well as for food pasteurization. The San Diego, California company is working with MITSUBISHI CORP. and a subsidiary specifically formed to introduce Titan's SureBeam technology to Japan. The new firm, in which the American business will acquire a minority interest, will purchase a turnkey system and set up a demonstration center in the coming months. Titan and Mitsubishi already are collaborating on product testing and procedures for converting users of Cobalt 60 for sterilization to SureBeam. They also will attempt to gain regulatory approval for the use of electron-beam technology for food pasteurization.

NANOGEN, INC., the developer of the semiconductor-based NanoChip instrument system, has awarded commercial manufacturing and distribution rights to its fully automated genetic microarray system to HITACHI, LTD. for certain research markets. A leader in the genetic analysis instrument field, the electronics giant will contribute proprietary technology to the project as well as provide technical support to get production of the NanoChip system off the ground. Hitachi also has nonexclusive rights to sell the San Diego, California company's NanoChip cartridges in Japan. The NanoChip system, which enables rapid identification and analysis of test samples containing charged molecules, currently is undergoing beta testing.

Completing an agreement that has been in the works since last year (see Japan-U.S. Business Report No. 359, August 1999, p. 14), PARACELSIAN, INC. gave KUBOTA CORP. exclusive rights to manufacture and market in Japan its Ah Immunoassay for detecting dioxin contamination in the environment. Dioxin contamination is a severe problem in Japan, mainly because huge volumes of waste are burnt everyday in municipal incinerators. The Ithaca, New York biotechnology company's test is a faster and far less expensive way of testing incinerator ash for this carcinogenic agent than existing systems. Kubota plans to start making the Ah Immunoassay in January 2001. The kit will be priced around $1,900, but each one can be used to test 10 to 20 samples. The Paracelsian licensee expects to build this product into a $47.6 million annual business in five years.

The Dektak OSP-1100 flat-panel display surface profiler codeveloped by VEECO INSTRUMENTS INC. and distributor ULVAC JAPAN, LTD. already has generated orders totaling more than $2 million from display manufacturers in Japan as well as in South Korea and Taiwan. The profiler, which is manufactured by the Veeco Metrology Group in Santa Barbara, California, was a response to the trend toward larger and larger flat-panel displays. The Dektak OSP-1100 can measure the thickness of thin film transistors and color filters during the production process for displays measuring up to 43 x 43 inches.

SHIMADZU CORP. soon could represent the full line of medical imaging systems produced by Cleveland-headquartered MARCONI MEDICAL SYSTEMS (formerly Picker International, Inc.). Their relationship dates back 10 years when the Japanese maker of precision instruments, including diagnostic imaging equipment, began to distribute Marconi's nuclear medicine systems. Last year, the MARCONI PLC unit added its high- end, shared-platform 1.0T Polaris and 1.5T Eclipse magnetic resonance imaging systems to the original MRI product line that Shimadzu handled. The distribution arrangement also was broadened in 1999 to cover a single-slice computed tomography system. Now, the two companies are discussing the possibility of Shimadzu selling Marconi's multislice CT scanners, including the Mx8000 CT scanner, and such oncology products as the ACQSIM CT simulation system. Existing products covered by the distribution arrangement are sold under the brand names of both companies. Moreover, Marconi and Shimadzu have codeveloped Japanese-language interfaces to facilitate operation of the U.S. manufacturer's medical imaging systems.

Switching marketing approaches, DIAGNOSTIC ULTRASOUND CORP., a supplier of 3D ultrasound products, established a direct sales and support channel through the establishment of TOUCHMETRICS K.K. The Redmond, Washington company's line had been handled by SUMITOMO CORP. With the opening of the Diagnostics Products subsidiary, the trader will become a nonexclusive distributor of such equipment as the BVI 3000 system. This all-digital product is intended for noninvasive bladder management. By avoiding the need for catheterization, it contributes to a big reduction in urinary tract infections.

A company that is developing an alternative to ionizing radiation to prevent the regrowth of tissue inside stented coronary arteries has forged a Japan tie. PHARMASONICS, INC. gave GOODMAN CO., LTD. exclusive distribution rights for six years to its URx intravascular sonotherapy system. In return, the importer and wholesaler of medical equipment will make a $6 million equity investment in Sunnyvale, California-based PharmaSonics. This money will help the company complete clinical trials and introduce worldwide its ultrasonic-based approach to reducing poststenting restenosis rates. PharmaSonics says that its procedure not only eliminates the risks associated with radiation but also is less expensive than that method of treatment as well as much simpler.

BIONX IMPLANTS, INC. awarded exclusive Japanese distribution rights to its resorbable urology stent products to TORAY MEDICAL CO., LTD. The wholly owned TORAY INDUSTRIES, LTD. subsidiary will be responsible for obtaining Ministry of Health and Welfare marketing approval for the Blue Bell, Pennsylvania firm's stent products. Toray Medical also will provide an undisclosed amount of funding to Bionx Implants for the development and registration of current and future products targeted at urology applications. This deal will free Bionx Implants to focus investments on its core orthopedic and craniofacial surgery implant businesses.

ARTHROCARE CORP. has broadened its distribution arrangement with KOBAYASHI PHARMACEUTICAL CO., LTD. The Osaka importer and wholesaler of medical equipment has handled the Sunnyvale, California company's Coblation-based arthroscopic system since 1997. Now, once it gains MHW marketing clearance, Kobayashi Pharmaceutical will distribute ArthroCare's Coblation-based ear, nose and throat and spinal surgery products. These systems, which consist of a controller unit and various disposable devices specialized for the type of surgery being performed, enable surgeons to remove, shrink or sculpt soft tissue while simultaneously sealing bleeding vessels. By limiting damage to surrounding tissue, ArthroCare say, its products potentially reduce the pain experienced by patients and aid recovery.

Disappointed with the sales results achieved by CENTURY MEDICAL INC., orthopedic joint replacement products maker ENCORE MEDICAL CORP. dropped that company and gave SENKO MEDICAL INSTRUMENT MANUFACTURING CO., LTD. exclusive distribution rights to its entire orthopedic joint line. The Tokyo firm already marketed some of the Austin, Texas company's trauma products, which gave it an inside track. However, Senko Medical Instrument had to cancel a distribution deal with another maker of orthopedic implant products to take over the Encore account. Encore makes products for hip, knee and shoulder replacements.

Continuing its push into the largely untapped market for prefillable syringes (see Japan- U.S. Business Report No. 359, August 1999, p. 22), BECTON DICKINSON AND CO.'s subsidiary introduced the single-use UniJect syringe. It is being sold to drug companies for dosage volumes of 0.5, 1 and 2 milliliters. Franklin Lakes, New Jersey-based Becton Dickinson also plans to market in Japan prefilled pen-style syringes for home use in anticipation of strong growth in the market for self-injected drugs.

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

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