Japan is moving through some structural social and economic shifts that could allow it to capture new and emerging opportunities, or face unprecedented challenges for future generations. The inflection point lies in its biotechnology industry.
Japan’s Aging Population and its Diseases
Japan today has a less than three people of working age for each retiree in the country. By 2030, it will have less than two. The ageing of Japan is thought to outweigh all other nations, as the country is purported to have the highest proportion of elderly citizens; 33.0% are above age 60, 25.9% are aged 65 or above, 12.5% aged 75 or above, as of September 2014. With a declining population, more than 25 percent of which are over 65, Japan faces a demographic imperative to extend the healthy lives of its citizens. That vision encompasses repairing damaged organs, replacing worn-out tissues with replacements grown from stem cells, and developing better drugs and biomedical devices
In order to make progress in dealing with its aging population, Japan’s leadership is going to have to make major investments in technology. “Japan’s aging demographic is a catalyst and driver for many aging population needs as aging population have greater medical needs. Specially, Japan’s investments on the technology side is world leading and likely to be an added value to the country going forward,” said Carole Bruckler, Partner, Head of Japan and Asia Pacific at Deallus Consulting in an interview with The Biotechnician.
Prime Minster Shinzo Abe Supports Japan’s Biotech Industry
Indeed, Prime Minster Shinzo Abe government committed ¥110 billion (about $1.1 billion) over 10 years toward more study of induced pluripotent stem cells (iPSCs), building on research by Kyoto University investigator and 2012 Nobel laureate Shinya Yamanaka, M.D., Ph.D. On January 6, Dr. Yamanaka announced plans to establish an international iPSC bank involving more than 10 countries, including the U.S. and U.K.
In addition, Prime Minister Abe government launched “Abenomics,” a series of broad economic policies designed to reverse some two decades of stagnancy by positioning Japan as business-friendlier—such as stimulus spending and targeted deregulation designed to remake Japan into, as he puts it, “the easiest country in the world for companies to operate.”
So far, there have been clear positive results from Prime Minster Abe’s policies. His government’s plans allowed Japanese biotech ventures to make jet fuel from algae and to create synthetic cartilage as the central bank has continued to pump money in the market. And Japan is attracting companies from around the world that are working to develop regenerative medicine treatments, thanks to a regulatory change that shortens approval times significantly.
Bruckler sees the Japanese government taking clear measures to support the growth of its biotechnology industry, and has seen short and long-term results. “The recent government reforms have been focused at catalyzing greater innovation and investment that are long-term levers for moving the industry. Their effects will be seen on a longer timescale only. In the more immediate term, the initiative to catalyze the opening of sales channels in foreign markets is likely to bear fruit, especially if it is expanded beyond just small and medium-sized companies on a case by case basis.”
Indeed the Japanese government has been working hard to reduce the drug lag over the past decade with investments in training and funding of the regulatory assessments. Based on the most recent approval data, the approvals in Japan are now as quick as Europe or the US and for MNC companies, there is certainly no downside in timelines in order to secure approvals in Japan.
International Firms Build The Competitiveness of Japan’s Biotech Industry
International biotechnology companies have been entering into Japan’s industry with the support of abenomics and the hope of tapping into the country’s innovation and government support.
Japan’s moves toward building biopharma appear to give U.S. companies a faster option for expansion into Asia than has been seen after a decade of engagement with China, Joseph Panetta, president and CEO of Biocom, the industry group for San Diego and southern California, recently said.
As a result of the recent moves, plus member concerns about China’s regulatory efficiency and knowledge of Western-style business practices, Panetta said, “what we’ve been doing in the last year is focusing more on Japan, and we see a lot of potential opportunity in Japan.”
Another factor stoking that interest, he added, was growing interest in U.S. partnerships by Japanese biopharmas; he cited Ajinomoto’s $175 million acquisition of San Diego-based Althea Technologies last year. That activity predates Abe: Daiichi Sankyo bought another San Diego company, Plexxicon, in 2011, while Takeda snapped up Intellikine for $190 million upfront (plus up to $120 million in milestone payments) that year and Millennium for $8.45 billion in 2008.
Panetta’s group awhile ago joined a few San American business groups in a trade mission to Japan that involved meeting his group’s Japanese counterpart, the Japan Bioindustry Association. Panetta recently said the trade mission laid groundwork for cross-promotional efforts launched this past fall at the bioindustry association’s meeting in Yokohama.
One company increasing its presence in Japan is Biogen Idec. Within a year, the biotech giant plans to double its workforce from 70 to 140 staffers, as well as double its office space to accommodate the growth. Many other American-based biotechnology firms are following see to accommodate their growing number of sales people and marketers in the country.
Dr. Yuki Abe, Key Account Manager/Senior Bioprocess Consultant Engineer, Biopharm, believes that international biotechnology and pharmaceutical firms that are coming to Japan will help enhance the island’s products and services, and push the country to become more competitive. “International biotechnology firms coming to Japan bring in much potential for the environment, especially in terms of bringing in new concepts and alternative options. Japan is expanding rapidly in cell therapies and gene therapies area driven by targeted investments from the Abe government and a change in the regulatory environment,” said Abe. “By having multi-national institution coming into Japan, I believe the culture in the work place will change little by little,” Abe added.
With the rise of competition from international firms, and with the support of Prime Minister Abe, Japan seems to be on track of regaining its dominance in producing novel therapies and drugs. The increasing importance of solving Japan’s aging problems coupled with the diseases that come with it, should also play a major role in pushing Japan to lead in biotechnology