Many Japanese pharmaceutical companies are now “global” in terms of scope and size. Companies like Takeda, Astellas, and Daiichi Sankyo have established their commercial footprint around the world. Accordingly, the business development teams at these companies are often looking to acquire global rights to products, or to acquire western companies outright, such as Astellas’ recent acquisition of Ocata Therapeutics.
While these companies are becoming more involved in the global landscape, Japan is still home, and all are eager to also explore Japan or Asia regional deals. In particular, with the changing Japanese pricing rules that tend to reward only new, innovative products, it is becoming increasingly critical for Japanese companies to in-license assets to supplement their internal pipeline.
For example, in 2015, Mitsubishi Tanabe completed two significant deals, acquiring the Japan/Asia rights to Regeneron’s anti NGF mAb, fasinumab ($55 million upfront and near term payments), and vadadustat from Akebia ($40 million on signing). Check out our full case study for more information on the Regeneron-Mitsubishi deal.
For Western companies, there are significant benefits to doing a Japan/Asia regional deal with a Japanese company. Such benefits include:
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Access to non-dilutive capital, often important for private biopharma companies
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Ability to create value in a territory for which the licensor is unlikely to invest in the necessary infrastructure and expertise to realize that value
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Inclusion of Japan in global development programs, with the Japan clinical study carried out by the partner
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Immediate validation of the asset
However, as many business development executives know, getting to terms and consummating a partnership with a Japanese company often takes patience.
For over 20 years, I have had the fortune of living and working in Japan. In Japan, we enjoy things like bullet trains, wonderful sushi, and a society that values attention to detail. Yet, it is this fine attention to detail that often creates challenges for Western business development executives trying to efficiently execute Japan partnerships.
Most deals with Japanese pharmaceutical companies take many months from the time of initial discussions to be completed as the details of the process work their way up from the business development team to senior management.
In my experience, there are tactics that western companies can use to expedite a Japan/regional partnership. These tactics include:
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Creating a compelling commercial assessment of the market opportunity in Japan. At Locust Walk, we often carry out in-depth face-to-face interviews with key opinion leaders in Japan, web-based quantitative research, and NHI pricing analyses BEFORE we even approach Japanese pharmaceutical companies with the opportunity. This commercial assessment is helpful to not only present the opportunity, but also defend deal terms during the negotiation.
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Better understanding the regulatory pathway in Japan for the asset. Over the last few years, the Japanese regulatory agency responsible for reviewing and advising on programs (the Pharmaceutical and Medical Devices Agency, or PMDA) has increased staff and their capabilities. Western companies can set up both preliminary meetings (no fee) or formal meetings (user fees charged) with the PMDA. In a formal PMDA meeting, a western company has the opportunity to present their proposed Japan development pathway and obtain written feedback from the agency. These official minutes can be extremely informative to a prospective Japan partner, and can expedite the due diligence process inside the company.
By proactively working to understand the commercial opportunity and regulatory pathway for an asset in Japan, a Western company can potentially expedite the deal making process with a Japanese company. This work prior to the outreach will not only support internal arguments for the deal economics, but will also assist the Japanese business development team to finally sell the deal to their senior management.
Locust Walk’s team on the ground in Japan is eager to help you accomplish your Japan partnering objectives. Feel free to reach out to me any time at steve@locustwalk.com.
Written by Steve Engen