Article preview from IN VIVO- May, 2010
Japanese pharmas are now serious contenders for partnerships outside their home country, increasing their spending on both alliances and acquisitions in recent years. This interest is fueled by a number of factors including slowing growth at home, pipeline failures, domestic consolidation, and a stronger yen providing favorable deal terms.
Based on acquisition data, the interest has primarily been in specialty arenas such as CNS and oncology, with an eye toward establishing a significant commercial presence in the US and European markets.
The increased desire to partner with Western biotechs is good news for smaller industry players as the recent spate of mega-mergers has resulted in a smaller pool of potential acquirers for their assets.
The first decade of this millennium saw an unprecedented amount of Japanese investment in Western biotechnology.Japanese drug makers have long been considered valuable partners based largely on their willingness to accept Japan-only deals. But an analysis of recent trends suggests that Japanese drug makers have become serious contenders for partnerships in territories outside their home country. Total values for ex-Japan alliances rose sharply between 2003 and 2008, by more than eightfold.
What has driven Japanese drug makers' recent interest in Western biotechnology? A number of domestic factors, including consolidation in the home market, regulatory changes that increase pressure on branded products, slowing growth, pipeline problems and a strong yen have become powerful forces for change. In fact, this momentous confluence of factors has provided an impetus to expand beyond traditional borders, reinvigorating – and redirecting outward – the deal making activities of historically inward-looking Japanese players. The end result: bigger, more global, and better-financed Japanese drug makers capable of partnering on a global scale. Their emergence is welcome news to biotechs looking for partners, since it comes precisely as market forces have driven multinationals to merge and the overall pool of potential licensors or acquirers is shrinking.
-by John K. Celebi
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