U.S.-Japan Technology Linkages in Biotechnology Challenges for the 1990s (1992) / Chapter Skim
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APPENDIXES
APPENDIXES
Pages 61-98
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From page 61... ...
In addition, the alliance contains several novel structural features that may shed light on possible future directions for U.S.-Japan biotechnology linkages. The Partners It might be useful to begin with a description of the partners and where agricultural biotechnology fits into their businesses.
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From page 62... ...
Joint ventures with companies possessing complementary technologies are particularly attractive because they allow Kirin to maximize the return on technology developed internally. Kirin's other partnerships in agricultural biotechnology include Tokita Seed (vegetables)
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From page 63... ...
Several factors make the potato market an attractive target for the apclication of agricultural biotechnology.
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From page 64... ...
Kirin made an initial asset purchase of 30 percent of Calgene's seed potato business for $2.5 million. The companies formed an operating joint venture, called Plant GeneticsKirin (PGK)
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From page 65... ...
Technical exchange goes on between the two partners through reciprocal research exchange visits and placements of up to 3 months. As in most biotechnology linkages that involve researcher exchange, the mechanisms
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From page 66... ...
One vulnerability that often arises in U.S.-Japan biotechnology linkages is overdependence on the contributions of particular individuals in making the alliance a success. It is often the case that long-standing relationships facilitate the formation of a venture, but this also means that partnerships rely heavily on the key players to keep the business on track and to resolve disagreements.
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From page 67... ...
Its research and market focus is on the field of monoclonal antibodies. The in vitro diagnostic products that are the basis of the linkage to STD were Monotech's first commercial products, and income from them has played a major role in bridging the gap to the revenue stream expected from the company's first therapeutic product, Mabex.
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From page 68... ...
companies for diagnostic products, and in therapeutics the company has put its emphasis on beta interferon, where it has collaborated with both American and Japanese companies. Showa earned a net profit of 40 billion yen ($296 million at 135 yen per dollar)
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From page 69... ...
During 1982, Monotech's cofounder and current chairman, William Nelson, made extensive efforts to find partners to market the firm's diagnostic products in each of the major markets_the United States, Europe, and Japan. Since Japan has very high rates of gastrointestinal cancer and MI-2 would be the first product to emerge from the pipeline, gaining access to that market received particular emphasis.
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From page 70... ...
Since reactive effects in patients are not an issue for in vitro diagnostics, clinical trials and the approval process in general are not as expensive or time consuming as they are for human therapeutics or in viva diagnostics. The main issue for establishing a product's effectiveness as a diagnostic tool is an assessment of the level of risk associated with a given blood level of antigen in specified clinical situations.
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From page 71... ...
In addition to the safety issues, an emotional aversion to radioactivity in Japan plays a part. Therefore, access to a large part of the Japanese hospital market requires the development of non-RIA kits and instruments.
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From page 72... ...
There are two system development programs and two kit development programs, and Toyo has a focused monoclonal antibodies program as well. This has escalated the costs of development, resulted in competing products reaching the market, and ultimately led to lower margins.
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From page 73... ...
For example, Japanese companies have made significant strides over the past decade in diagnostic biotechnology fields. STD might give Monotech knowledge and access to technology developed in Japan that it might not find out about, or have an inside track to license, otherwise.
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From page 74... ...
Through awareness of changes in the global market and maintenance of a technical edge, American biotechnology companies may be able to define and accomplish changes in the structure of their technology linkages to Japan in order to ensure maximum leverage and increasing benefits over time. CASE III: KIRIN-AMGEN Kirin-Amgen, Inc., the joint venture established in 1984 to develop and market erythropoietin (EPO)
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From page 75... ...
It received approval in Europe at about the same time, and was waiting for approval in Japan at the time of this printing. Amgen is taking the drug through clinical trials for other indications, such as burn cases and pneumonia.
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From page 76... ...
It was initially anticipated that most of this start-up capital would be spent getting the drug through clinical trials in the United States; the Japanese approval process was expected to drag on for a longer period but to be cheaper. The venture would be managed by a board composed of three representatives from each company, with the president/CEO post held by Amgen and the chairman slot controlled by Kirin.
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From page 77... ...
Kirin has Japanese rights, Amgen has rights in the United States, and the venture owns rights in other markets. Kirin and Sankyo face competition in the Japanese market, where Chugai accounted for over half the sales of EPO as of mid-l991.
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From page 78... ...
Development and clinical trials were financed by the joint venture. During 1991 Kirin-Amgen paid Amgen $14.6 million for contract research, and Amgen paid the venture $17.1 million in royalties on sales of Epogen and Neupogen.
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From page 79... ...
Kirin handled all the clinical trials in Japan, for both EPO and GCSF, including animal trials. These are not required for the FDA, but they were used in the United States and other parts of the world to bolster the case with regulators.
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From page 80... ...
Kirin was also able to achieve its stated goal of technology leveraging. Finally, the company was able to use the experience gained by its technical personnel through Kirin-Amgen to establish a basic research facility in the United States.
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From page 81... ...
What can be said now is that the partners are working hard to ensure that the relationship benefits both sides, and they hope that the structure of their agreement and the process for reaching it can serve as something of a model for new forms of university-industry research interaction. The Partners Hitachi Chemical Research is a wholly-owned U.S.
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From page 82... ...
Hitachi, Ltd., owns over 50 percent of Hitachi Chemical. In the fiscal year ending March 1990, Hitachi Chemical registered sales of over 466 billion yen ($3.5 billion at 135 yen per dollar)
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From page 83... ...
Leases had already been written that could be adapted to the particular case, and the campus also had accumulated experience in negotiating agreements for shared facilities, which was useful in dealing with Hitachi Chemical. Negotiation Process and Issues Hitachi Chemical was receptive to the basic concept of a swap of leases and the construction of a shared research facility at the outset, and it set up the Hitachi Chemical Research subsidiary to negotiate an agreement and manage the lab.
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From page 84... ...
Although UCI officials went out of their way to ensure that Hitachi Chemical was given no consideration that would not be extended to domestic or local companies, they were concerned that it might be perceived that they had done so. The university realized that very few, if any, U.S.
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From page 85... ...
University policies that govern research interaction are covered in a number of documents and come to several hundred pages in all. Federal and state regulations have an impact as well.
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From page 86... ...
A sublicense to the parent company, Hitachi Chemical, can be considered in this situation as well. HCR, in addition to technology developed in projects that it sponsors itself, may also be allowed to license technology that arises from other research at UCI.
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From page 87... ...
He holds a UCI adjunct faculty appointment in the Department of Biological Chemistry. There are over 20 HCR staff members on the top two floors of the building.
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From page 88... ...
The three UCI research groups on the first floor do basic biochemical research representative of what is being done in many research universities. One group is working on mapping human chromosomes, which may have implications for pinpointing and curing genetic disorders.
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From page 89... ...
For example, biotechnology is a relatively new technological field for Hitachi Chemical and pharmaceuticals are a new business. In addition, the decision to launch into biopharmaceuticals by building a basic research capability represents a departure from the approach taken by Kirin and other large Japanese companies, in which a gradual shift of research focus was accompanied by linkages with U.S.
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From page 91... ...
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From page 97... ...
Future Global Technology and Industry Trends STEVE BURRILL, Ernst & Young (discussion leader) Comments by: Robert Easton, The Wilkerson Group Isao Karube, Tokyo University David MacCallum, Hambrecht & Quist Break Trends in Technology Linkages MARK DIBNER, North Carolina Biotechnology Center (discussion leader)
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From page 98... ...
Investment Issues STELIOS PAPADOPOULOS, PaineWebber (discussion leader) Comments by: Joseph Lacob, Kleiner Perkins Caufield & Byers Robert Riley, Bristol-Myers Squibb Co.
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