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No. 351, December 1998

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American Companies in Japan


A third major Japanese pharmaceutical company has acquired a license to use GENETICS INSTITUTE, INC.'s DiscoverEase protein development platform. SANKYO CO., LTD. joins CHUGAI PHARMACEUTICAL CO., LTD. and KIRIN BREWERY CO., LTD. in using the Cambridge, Massachusetts company's library to accelerate the drug- discovery process. The library contains novel human, secreted proteins, their corresponding DNAs (deoxyribonucleic acids) and a companion data base of information. Genetics Institute is a wholly owned subsidiary of AMERICAN HOME PRODUCTS CORP.

The merger and acquisition activity constantly going on in the United States generally entails the renegotiation of distribution arrangements in Japan for companies active in that market. As a case in point, BECTON DICKINSON AND CO., the world leader in flow cytometry systems for both the research and the clinical market, gave FUJISAWA PHARMACEUTICAL CO., LTD. rights to sell antibodies and reagents for immunological research. The Franklin Lakes, New Jersey diagnostic equipment supplier gained a significant number of the 300 reagents covered by the agreement when it bought PHARMINGEN in mid-1997. Fujisawa Pharmaceutical was a minority owner of that Del Mar, California manufacturer as well as its exclusive Japanese distributor. By working out a new contract with the drug maker, Becton Dickinson's subsidiary hopes to lift sales of the Leu Series of flow cytometry-related reagents to $8.3 million in 2000 from an estimated $6.6 million in 1998.

Sometimes, of course, new distribution arrangements are required because the original ones did not pan out. That was true for SONUS PHARMACEUTICALS, INC., which terminated a March 1995 agreement with DAIICHI PHARMACEUTICAL CO., LTD. The pact gave the midsize drug company marketing and distribution rights to the Bothell, Washington firm's EchoGen ultrasound contrast agent in Japan and nine other Pacific Rim nations. Daiichi Pharmaceutical completed Phase I clinical trials in Japan in December 1997, but it did not follow up the safety and efficacy tests with additional clinical work, even though the results of the initial study were encouraging. SONUS reported that several other companies are interested in obtaining the Pacific Rim license for EchoGen and another ultrasound contrast agent in development.

Technology developed by TEXACO INC. that shows promise for converting waste plastics into usable products without environmental degradation has been licensed to DAICEL CHEMICAL INDUSTRIES, LTD. In very simplified terms, the process produces among other gases carbon monoxide, a raw material for the acetic acid that is one of Daicel's major products. The chemical manufacturer plans to employ the Texaco technology in a pilot plant to be built in Himeji, Hyogo prefecture as part of a waste plastics gasification project. Companies in Japan are under increasing pressure to find environmentally safe ways to recycle plastics because of new, more encompassing legal mandates. In 2001, for instance, TV sets, air conditioners, refrigerators and other home appliances made from plastics have to be recycled. Texaco will test its technology in Rotterdam, the Netherlands starting sometime in 1999 at a plant capable of processing 50,000 tons of waste plastics a year.

An exchange rate of ¥121=$1.00 was used in this report.

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