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No. 356, May 1999

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American Companies in Japan


The economy might be in trouble, but MERCK & CO., INC. and PFIZER INC. are optimistic about their medium-term Japan prospects. So optimistic that both plan to expand their sales forces to the size of the biggest Japanese pharmaceutical companies. Merck's majority-owned BANYU PHARMACEUTICAL CO., LTD. subsidiary expects to have between 1,500 and 1,600 medical representatives within five years compared with 1,260 now. For its part, Pfizer's wholly owned subsidiary will hire about 560 people over the next three years, increasing its sales force to 1,500 or so. With more people in sales, Merck and Pfizer alike will put more emphasis on hospitals.

Extending an early 1995 agreement, CORTECH, INC. has awarded ONO PHARMACEUTICAL CO., LTD. worldwide rights to an oral elastase inhibitor on which the two have been working. The Osaka company's rights previously were limited to Japan, South Korea, the People's Republic of China and Taiwan. Elastase is a protein-degrading enzyme that is thought to play a major role in tissue damage and organ failure in patients with severe inflammatory conditions. Ono's clinical studies will target chronic obstructive pulmonary disease and rheumatoid arthritis. In exchange for the expanded license, the Japanese drug company has given Far Hills, New Jersey- based Cortech $2 million upfront. It also will make milestone payments that could total $9.5 million as well as pay royalties on sales.

Effective June 1, the renamed GE TOSHIBA SILICONES CO., LTD. will be responsible for the Asian Pacific business of the GE Silicones unit of GENERAL ELECTRIC CO. Until the change, those managerial functions were carried out by the Hong Kong office of GE Silicones. With the economies of East Asia starting to recover, GE Silicones is looking for a minimum increase of 10 percent in its regional sales in 1999. Sales of the company's sealing products have held up fairly well in Japan but have been weak in such key markets as China, South Korea and Hong Kong. GE Toshiba Silicones (formerly Toshiba Silicone Co., Ltd.) is a longtime manufacturing and marketing venture between GE and TOSHIBA CORP.

DOW CHEMICAL CO.'s subsidiary has put on the market an environmentally friendly pesticide that has as its active ingredient spinosad. Derived from naturally occurring actinomycete bacteria without additional chemical processing, spinosad is effective against caterpillars that attack such plants as cabbage. The product is available through such Dow distributors as KUMIAI CHEMICAL INDUSTRY CO., LTD., NIPPON SODA CO., LTD., NISSAN CHEMICAL INDUSTRIES, LTD. and SHIONOGI & CO., LTD. The company believes that sales could total $20.8 million in 2003, particularly if it succeeds in expanding the applications for spinosad.

MULTISORB TECHNOLOGIES, INC. signed a second company to distribute its packaged sorbent products, including desiccants for absorbing moisture. Osaka- based FUJI GEL SANGYO LTD., a major supplier of silica gel, expects particularly strong demand for the Buffalo, New York company's MiniPax sorbent packet since there is nothing comparable in Japan for packaging such products as pharmaceuticals and medical diagnostic kits. NIPPON KAKO-KIZAI CO., LTD. is Multisorb's other distributor (see Japan-U.S. Business Report No. 352, January 1999, p. 11).

An exchange rate of ¥120=$1.00 was used in this report.aaaaaa

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