Japan’s drug firms branching out

October 3, 2006
Vancouver Sun
By Gillian Shaw

Takeda’s purchase of Xenon part of a trend to compete globally

When the team from Xenon Pharmaceuticals sat down to dinner Sunday with executives from Takeda Pharmaceutical Co. to celebrate an $80-million US deal, one of the Japanese guests pointed out it was his first visit to Canada.

Representing the largest pharmaceutical company in Japan, he is in the United States at least 10 times a year and Europe for six visits annually.

It’s a travel itinerary that is likely to change as major pharmaceutical companies in Japan find themselves the partner of choice for Canadian biotechs looking to expand in Asian markets and find funding to keep their programs going at home.

It’s a change from the days when deals were struck only between major corporations. “The Japanese companies are trying to truly compete in the global market today,” said Xenon Pharmaceuticals CEO Dr. Simon Pimstone, who announced the partnership with some comments in well-practiced Japanese. “They have become more aggressive in their licensing deals with biotech companies outside of Japan.

“There is an interesting issue at play in the sector today where Japanese companies are looking aggressively outside Japan for new product opportunities. They are trying to compete with the Pfizers and the Mercks of the world to compete for interesting molecules.” “That is a huge sea change from the last five, 10 years,” said Vijay Sondhi, Xenon’s chief financial officer. “Before they did go outside their borders but it was working with large companies. “For them to deal with the little guys where a lot of the innovation is coming from is very new.” And they are coming to North America to do it. Takeda has almost 50 per cent of its revenues coming out of the U.S., which is much bigger than their revenues coming out of Japan,” said Sondhi. “They are trying to establish themselves as a global pharma with Japanese headquarters.”

For the 70-person Xenon, which focuses on genetics-based drug development, the process of putting the deal together was no different than the partnerships it has already established with Switzerland’s Novartis and the U.S.-headquartered Pfizer.

Monday’s announcement represents a growing trend and one B.C.’s biotech sector is actively promoting.
Karimah Es Sabar, executive director of BC Biotech, said her organization made a recent trip to Japan where it joined in events showcasing B.C. firms.