Japan-US Business Report LogoJapan-U.S. Business Report

No. 347, August 1998

Issue Index

Japanese Companies in the US


In a major expansion of its business, automotive coolant manufacturer INTAC AUTOMOTIVE PRODUCTS, INC. bought DOW CHEMICAL CO.'s North American OEM (original equipment manufacturer) factory-fill coolant operations. The acquisition includes a license to the chemical giant's production technology for ethylene glycol-based automotive coolants and its customer list as well as transitional technical support. The value of the transaction was not disclosed. Lemont, Illinois-headquartered INTAC, a partnership between CCI CORP. and MITSUBISHI CHEMICAL CORP., had about 20 percent of the U.S. coolant market before the purchase of Dow's business, with 1997 sales of $28 million. Its customers include CHRYSLER CORP., FORD MOTOR CO. and Japanese-affiliated car and truck makers operating in North America. INTAC itself is the result of a 1990 acquisition. It also makes windshield washer and brake fluids.

A midsized Japanese drug company will help a small Redwood City, California biotechnology company fund the development and the commercialization of a possibly potent treatment for cancer that involves angiogenesis, or cutting off the blood supply to tumors. The partners are TAIHO PHARMACEUTICAL CO., LTD. and SUGEN INC. Taiho Pharmaceutical will put up as much as $70.9 million to cover the costs of preclinical and clinical trials of Sugen's SU5416 angiogenesis inhibitor in exchange for marketing rights in Japan. SU5416 prevents the formation of the new blood vessels that tumors need to grow by blocking a receptor known as Flk-1/KDR in the blood vessels' endothelial cells. While experts agree that Sugen's angiogenesis inhibitor and similar products under development by other American biotech companies hold considerable promise as a cancer treatment, they also caution that commercialization is a long way off.

In back-to-back deals, two Japanese companies gave AGOURON PHARMACEUTICALS, INC. exclusive rights in North America, Europe and certain other countries to develop and commercialize treatments potentially effective against the human immunodeficiency virus. SHIONOGI & CO., LTD.'s candidate is a second-generation nonnucleoside reverse transcriptease inhibitor code-named S-1153. Although less powerful than protease inhibitors, the drug could prove effective in combination with other antiretroviral treatments. La Jolla, California-based Agouron will pay Shionogi a $40 million licensing fee, including $10 million up front, and royalties on sales. For its part, JAPAN ENERGY CORP. licensed to Agouron a HIV protease inhibitor known as JE-2147 that possibly could take the place of similar compounds no longer effective against the virus. The developer will receive licensing fees of up to $26 million, starting with a $6 million down payment, and royalties on sales. The American drug company plans to start clinical studies of JE-2147 in 1999.

An antidepression drug codiscovered by MEIJI SEIKA KAISHA, LTD. and a Danish company has been licensed to PHARMACIA & UPJOHN, INC. Code- named ME 3127 by the Japanese company and NS 2710 by its collaborator, the compound works on a brain chemical known as GABA that is involved in anxiety levels. The Kalamazoo, Michigan company has worldwide development and commercialization rights to the treatment outside of Asia and Nordic countries. Financial terms were not disclosed, but Pharmacia & Upjohn will make initial, milestone and royalty payments to Meiji Seika and its partner.

Two transpacific collaborations recently reported progress on their research and development agendas. KISSEI PHARMACEUTICAL CO., LTD. and VERTEX PHARMACEUTICALS INC., which are trying to find treatments for inflammatory and neurological diseases, have selected VX-745 as a lead drug development candidate targeting p38 mitogen-activated protein kinase, a human enzyme involved in the progression of inflammation. They expect to begin clinical trials of VX-745 next year. Under a late 1997 arrangement, Kissei Pharmaceutical agreed to provide up to $27 million over three years to develop and commercialize orally active p38 MAP inhibitors (see Japan-U.S. Business Report No. 337, November 1997, pp. 2-3).

At the same time, under a R&D program sponsored by ONO PHARMACEUTICAL CO., LTD. (see Japan-U.S. Business Report No. 342, March 1998, p. 2), TREGA BIOSCIENCES, INC. has come up with several lead compounds for the treatment of certain inflammatory diseases mediated by the melanocortin-1 receptor pathway through cytokine regulation. This identification of small molecules acting on melanocortin receptors was accomplished by screening its combinatorial chemistry library. The San Diego, California drug discovery company now will optimize the lead compounds and conduct preclinical testing.

GEN-PROBE INC. — a wholly owned San Diego, California subsidiary of CHUGAI PHARMACEUTICAL CO., LTD. and a leading developer of genetic probe tests designed to detect a wide range of microorganisms — and CHIRON CORP. have teamed up to develop, manufacture and market nucleic acid probe assay systems for screening the blood supply as a complement to existing immunological methods. The partners' initial target is a combination assay for early detection of HIV and hepatitis C in blood samples. Currently in evaluation studies, this product is expected to enter worldwide clinical trials late this year. It draws on Emeryville, California-based Chiron's intellectual property relating to screening blood for HIV and HCV and Gen-Probe's transcription-mediated amplification technology and its TIGRIS system, the first fully automated, high- throughput DNA (deoxyribonucleic acid) probe instrument for blood screening and diagnostics. Development of that system is nearing completion.

An exchange rate of ¥141=$1.00 was used in this report.

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