1. 日本の製薬会
Bridging the ‘Information-Gap’ of Japan Pharma:
Sources & Tools!
An Interactive Webinar
July 25th, 2011
6:30 AM (NY), 11:30AM (London), 4:00PM (Delhi), 6:30PM (Beijing), 7:30PM (Tokyo)
Schedule (IST):
• 4:00PM: Welcome note & introduction of speakers and brief about Webinar – Tarun Shah of MP
Advisors
• 4:05PM: ‘Opportunities in Japan Pharma – Post Turbulent Times’, by Dr. Kimura, CEO of Life
Sciences Management Inc.
• 4:20PM: ‘Tools for Procuring Japan Pharma Information’ and introduction & functionality of
• MP-Japan Pharma database’, by Devesh Singh of MP Advisors
• 4:35PM: Japan – Current Manufacturing Practices & Likely Changes’, by Dr. Garugu, CEO, NuLink
Co. Ltd.
• 4:50PM onwards: Q&A Session
MP Advisors

2. Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools!
An Interactive Webinar
Japan Pharma:
Opportunities Post Turbulent Times
By
Hiromichi Kimura, Ph.D.
CEO of Life Science Management, Inc
http://www.lsm-jp.com/index_e.html
July 25th, 2011
Webinar - Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools!

3. Japan Pharma: Key Thoughts
• Japanese Pharma market is stable if not rapidly growing; it
remains second largest and one of the most predictable
markets in the world
• Japanese Pharmas have poured enormous amount of money,
$40B into foreign Pharmas in last 3 years – will continue this
trend for a while.
• Because the Japanese government has been committing to
double the Japanese generic market, everyone is chasing to
grab growth opportunities in Japanese generic market.
Webinar - Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools!

4. Overview of Japanese Pharma
Global Sales of Japanese Pharmaceutical Companies
($b)
1st Tier
- Innovation
- New Market Development
2nd/3rd Tier
- Seeking for Survival Strategy
Generic Pharmas
- Growth Opportunity Note: 2009, $1=80
Webinar - Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools!

5. 1st Tier: M&A
Investment for New Technology and Therapeutic Areas
Company Acquired Acquisition Cash Paid ($b) Purpose of Acquisition
company date
Takeda Millennium May-08 11.1 Oncology
Plexxikon Feb-11 0.81 Oncology
Daiichi Sankyo
U3 Pharma May-08 0.30 Oncology/Biologics
Astellas OSI Pharma May-10 4.60 Oncology
MGI Pharma Jan-08 3.90 Oncology/Vaccine
Eisai
AkaRx Jan-10 0.25 Leukemia/Oncology
Investment for New Market Development
Company Acquired Acquisition Cash Paid ($b) Purpose of Acquisition
company date
Takeda Nycomed May-11 14.0 EU/Emerging Country
Daiichi Sankyo Ranbaxy Oct-08 4.6 Emerging Country/Generic
Note: $1=80, 1Rupee = $0.023
Webinar - Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools!

6. 2nd Tier: Seeking for Survival Strategy
Oncology: Looking for alliance partners
Kyowa Hakko Kirin, Nippon Kayaku
Trying to go beyond critical mass
Shionogi, Dainippon Sumitomo
Domestic focused companies
Ono, Kyorin, Mochida, Kissei, Nippon Shinyaku
Company Sales(2010, MKT % of % of Long- Focus Areas
$M) Cap($M) Domestic listed
Sales
Ono 1133 4,233 97% 80-90% Bioactive Lipids, enzyme inhibitors
Kyorin 867 980 97% 50% Respiratory, otolaryngology & urology
Mochida 627 853 Over 90% 80% Diabetes, obesity, chronic pain
Kissei 537 741 Over 90% 62% Genitourinary ,metabolism &
endocrinology
Nippon 529 582 Over 90% 50% Urology, hematology, obstetrics &
Shinyaku gynecology
Webinar - Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools!

7. Generic Pharma: Growing Opportunities (1)
($b) Japan Rx Drug Market (Sales)
Total Rx Market:
CAGR 2.0%
The Japanese government
has been committing to
increase the Japanese
generic market to 30% of
Total Rx Drug in Volume Gx Market:
CAGR 16.4%
Almost doubled in 4 years
Note: $1=80 Precondition: NHIP (Yakka) is stable during the term
Webinar - Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools!

8. Generic Pharma: Growing Opportunities (2)
Japanese Pharmas:
1st Tier: Establish a subsidiary dealing with Generic
• Takeda-Aska, Daiichi Sankyo-DS Espha, Eisai-Elmed Eisai
2nd Tier: Move to generic company
• Meiji, Kissei, Nippon Chemiphar
Overseas Pharmas: M&A/Alliances for entry to Japan
Teva: Acquired Taiyo Phama
• $500M for 57% of stake of Taiyo.
Sanofi Aventis: JV with Nichiiko
• Sanofi:51%, Nichiiko: 49%
Webinar - Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools!

9. 日本の製薬会社
Bridging the ‘Information-Gap’ of Japan Pharma:
Sources & Tools!
An Interactive Webinar
Introducing Japan Pharma Database [MP-JPD®]
& Addressing Unanswered FAQ
July 25th, 2011
Devesh Singh
Sr. Analyst (Japan Pharma), MP Advisors
www.mpadvisor.com
devesh@mpadvisor.com
!
! Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools! 1

10. Procuring Data & Info.: Japan Specific Challenges
Formulating a competitive landscape of various therapeutic classes in
Japan is challenging viz a viz the US and EU markets due to:
1. Operations of various MNCs who generate significant amount of revenue but do not
disclose their sales – Market Research Agencies have their limitations; no
projections
2. Disclosure of Clinical trial data – is limited/not detailed and is shared after a long
gap.
3. Lack of equivalent sites such as clinicaltrials.gov, FDA’s Orange book, etc. –
company reports, various categories of CT data available at scattered sources.
Mostly in Japanese.
4. Very Difficult to get patent expiry info. from JP cos - Multiple patent extension, NO
reliable Source in public domain
5. Large contribution of ‘Japan Only’ products - difficult to make competitive
landscapes for overseas companies
6. Difference in clinical practices – e.g. GERD (H2 blockers vs. PPI’s)
7. Language
Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools! 2

11. ‘Japan Only’ Products: Specific Challenges
‘Japan Only’ Products
Drug Originator Licensee JP Launch sales
Radicut Mitsubishi Tanabe Not licensed 2001 28.0
Coniel KyowppHakko
a Not licensed 1991 21.00
Gasmotin Sumitomo Takeda 1998 20.70
Anplag Mitsubishi Tanabe Not licensed 1993 16.9
Ceredist Mitsubishi Tanabe Not licensed 2000 16.3
Prorenal Ono Dainippon Sumitomo 1988 15.4
Depas Mitsubishi Tanabe Not licensed 1984 11.6
Ebastel Sumitomo Meiji Seiku 2005 9.20
Source: MP Advisors, Company reports
Dependence on ‘Japan Only’ Products
JP focused products Weight of JP
Key products sales sales (sold in JP focused products
Company (¥b) only) (¥b) (%)
Mitsubishi Tanabe 201.10 91.3 45.4%
Dainippon Sumitomo 190.80 72.5 38.0%
Kyow a Hakko 106.60 22.8 21.4%
Kyorin 83.25
Source: MP Advisors, Company reports
Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools! 3

12. Multiple Patent Extension: Japan Specific Challenges
Multiple Patent Extension: Relative Standing
Japan US EU
Introduction 1988 1984 1993
Maximum 5 years 5 years 5 years
period
No.of Multiple Only once Only once
extension possible
No.of patent Multiple Only one Only one
eligible for possible
extension
Source: MP Advisors, Company reports
• Basic patent term can be extended multiple times e.g. by adding new indications
• Related patents (method of use, mfg. etc.) can also be extended multiple times
• JGPMA request to JPO to Limit the extension to only one patent and only once
CASE STUDY: Multiple patent extension of levofloxacin (~¥44b FY 03/10 A):
Launched in Nov-93; JPO gives two entries for Cravit, showing application in 1990 (reg #
2523210) & 1993 (Reg. # 3244983 )!
1st staphylococcus and other 30 bacterium June 2006
2nd Anthrax, Pest, etc. October 2006
3rd Typhoid Fever , Paratyphoid Fever November 2007
4th Legionella June 2011
Most recently Levofloxacin received mfg. approval for 500mg/100ml IV bags & 500mg/20ml
injections in Oct, 2010
Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools! 4

13. Making Of MP-JPD® (Secondary Data)
A number of reliable secondary sources continuously scrutinized
Brands/ Company/ Sales
• Crecon consulting Inc.
• Japan Pharmaceutical reference (JPR)
• Company reports
• Drugs in Japan-2011 [本医薬品集フォーラム／監修 ]
Patents & R&D/Pipeline
• IPDL (Industrial Property Digital Library)
• Japan Pharmaceuticals Information Center (JAPIC CTI)
• UMIN Clinical Trials Registry (UMIN-CTR) – in case physician belongs to university hospitals
• JMA CCT – in case physician belongs to private hospitals
Regulatory Related
• Korosho / Kosei-roudou-sho (MHLW)
• Kiko (PMDA)
• Kokuho Chuoukai (NHI)
• Chuikyo (Central Social Insurance Medical Council)
Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools! 5

14. Making Of MP-JPD® (Primary Data)
Primary data enriched thru ~25yrs of experience base
Primary Data Sources:
HISTORIC DATA POINTS
• MP proprietary financial models (15+ companies; all majors)
• In-house library of clinical data points from global companies
PROJECTING FUTURE
• Analyst’s projections of sales thru 2016 (~350 key products, ~60% of total market)
• Analyst views on NCE/NBE pipeline (viz. based on clinical data analysis, competitive
landscape)
• Data acquired through interviewing management, supply chain etc - patent expiries
(~250), issues related to ongoing trails etc.
• Interviews with ‘key opinion leaders’, regulators (views on price cuts, expected
regulatory changes and incorporating them in projections)
Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools! 6

15. MP-JPD® : Addressing FAQ
Replace name of any product/ pipeline candidate/ thx. class/ company/ time
line etc. (from 1000+ products, 100+ companies & 450+ pipeline
candidates) – Illustrative Examples Only
1. What % of sales of Toyama chemical is exposed to generics and what additional % will
add-in in next 4 years?
2. There are rumors that MSD is taking over Santen – what could be the rational and
synergies between the two for products & pipeline?
3. How many products of Abbott are actually owned by Japanese mfg. & which are these
companies?
4. Which companies lead the Chinese medicine market and how it is evolving?
5. How the anti-diabetic market in Japan is evolving? How DPP IV & SGLT-2 inhibitors
classes are shaping up & how they going to impact GLP-1 analog class?
6. Does anti-inflammatory segment offer opportunities of API/intermediate supply?
7. What are the opportunities for generic companies in anti-Parkinson's market?
8. What are opportunities for the generics manufacturers in next 5 years – within this
what are the opportunities for generic drugs from metabolic & cardiac thx classes?
9. Which companies will hold their patent protected revenues in 2020?
Make 1000’s of such questions and MP-JPD® will answer them!
Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools! 7

16. Bridging the ‘Information-Gap’ of Japan Pharma:
Sources & Tools!
An Interactive Webinar
Current Manufacturing Practices & Forecasting
Changes in Practices
By
Hisamaro Garugu
July 25th, 2011
1

17. Pressure Points For Acquiring Mfg. Synergies From Overseas
Optimizing Cost: A number of pressure points force Japanese companies to
search for methods to reduce cost, as little scope of further cost optimization
exist from within Japan -
• High medical expenditure & govt.’s pro-generic policies
• No control on price & biennial price cuts
• Lower margins vs. US/EU/ Indian companies – further deteriorating
• Increasing long-listed drugs contribution
De-Risking of Mfg. Facilities:
• Post natural disaster (in March 11), need of decentralizing mfg. capabilities
(outside Japan) has intensified
Japanese Pharma Need of Growing Global:
• Improved technological capabilities in developing countries
• Other Jap industries (e.g. automobile) has already been utilizing costs
synergy thru overseas alliances – Pharma is legging but will have to join
2

18. Biennial Price Cuts – Continuing Pressure to Optimize Cost
‘Yakka-sa’ vs. Price Cuts
25.0
23.1
20.0
17.8 Yakka-sa (%)
14.5 Price cuts (%)
15.0
% value
13.1
10.0 9.5
8.4
7.1 6.5 6.9
9.7 6.3
6.6 6.8 7
5.0 6.7 6.2
6.3
5.2
4.4 4.2
0.0
A
2010 E
1994 A
1996 A
1998 A
2000 A
2002 A
2004 A
2006 A
2008 A
1992A
Year
Source: MP Advisors, MHLW
Price-Cuts are Regular Exercise – But the Threshold is Reached!
3

19. De-Risking of Mfg. Facilities
Japanese Mfg. Plants Affected During Tsunami/Earthquake in March. 11
Company HQ Name / Nature of Affected Production Facilities / products
Astellas Tokyo Nishine (Harnal & antibiotics) & Takahagi (bulk of Harnal)
Daiichi Sankyo Tokyo Onahama (API) & Akita (formulation)
Eisai Tokyo Kashima plant & Tsukuba labs (R&D Center)
Utsunomiya (major plant that makes – Actemra, Neutrogin and
Chugai Tokyo
Epogin)
Out of total major facilities, 2 are located in affected areas –
Mitsubishi Tanabe Osaka
Kashima (Redicut) & Askana (Ursho).
Kanegasaki plant - Bulk chemical manufacturing , antibiotic,
Shionogi Osaka
analgesics for cancer pain
Kyowa Hakko
Tokyo Takasaki plant & Fuji plant
Kirin2
Sawai Osaka Kanto
Towa Osaka Yamagata
Nich-Iko Toyama Yamagata factory & Saitama factory
Source: MP Advisors, Company Reports
4

20. 1/3rd of Current Market* Approaching Patent Expiries
Screenshot from MP-JPDB’s Company Analysis Section
~200 products going off patent in next
4yrs (worth ~¥2tr today) will come under
generic pressure & their manufacturer will
look for cost optimization to remain
competitive – foreign alliance for
* Excluding long-listed products sales
API/intermediates will be one such
measure…
Source: MP- Japan Pharma Database
5

21. Series of Reforms to Shape Future
Reforms That Will Increase The Use Of Generic Drugs
Near term impact (Already in force) Long term impact (>2yrs+)
• Biannual Price Cuts • Patients Co-payment
• Reversal Of ‘Check Box’ In Rx Form • Freedom To Stock One Generic Brand
• DPC Expansion • DPC For Out-patients
• Higher Dispensing Fee • Free Pricing For Generic Drug
• Mandatory Approval Of All Strengths • Freedom From Product Detailing
Reforms That Will Foster Innovation
Near term impact (Already in force) Long term impact (>2yrs+)
Reforms That Will Foster Innovation
• Increased Number Of Reviewers • Cost Based Pricing
• Better Infrastructure & Support for Clinical Trials • No Price Cuts During Patent Period
6

22. New Govt. Supply Rules for Generic Manufacturers
All Generic manufacturers* must be able to supply all strengths of
drugs for which a generic or original drug is legally available in order
to maintain stable supplies. This is irrespective of the profitability of a
particular drug or dosage form
*This is a great burden on a generic drug suppliers in Japan.
Countermeasures:
• Tie up with local competitors to save cost and time like TOWA, SAWAI
and NICHI-IKO at the R & D stage
• Branded and Generic Companies look to expand through partnership
and M&A with outside firms in order to increase generic product lines,
increase production values and stable supply
7

23. Master File System for Drug Substance
• Foreign manufacturer of drug substance (~API/intermediate) has to
apply for MF registration through an in-country caretaker with an
address within Japan
•
MF registration application form, notification, and other related
documents shall be written in Japanese.
• Before filing MF, it is necessary for a foreign manufacturer to obtain
a foreign manufacturer accreditation
8

24. GMP Inspection
GMP Inspection has been indispensable for marketing approval since revision of
pharmaceutical Affairs Law in 2005.
Applicant: Marketing authorization holder Inspector: PMDA
GMP Inspection conducted for marketing approval or approval of partial changes.
- Applicants must submit application documents more than 6 months prior to approval.
Periodical GMP Compliance Inspection
- Periodical GMP Inspection is conducted every five years following marketing approval.
- Generally, Periodical GMP Inspection and Renewal of Accreditation of Foreign
Manufacturer are applied at the same time more than 6 months prior to expiry date of
accreditation.
On-site Inspection: Conducted for about 3 days at foreign manufacturer’s site by PMDA
Document Review: The documents submitted by applicant are reviewed by PMDA
In the case the documents are insufficient, Additional documents are requested.
9

25. Evolving Trends in Mfg. Alliances
• Korea and Taiwan are already enjoying formulation production alliances with
Japanese pharma
• Japan Pharma Inc setting up plants in India
• Otsuka had a plant since many years
• Eisai has a API to Formulation integrated plant in South India
• Daiichi Ranbaxy, Ajinomoto-Granuls India etc.
• API come from several countries – Korea and Europe are major ones. China
and India just started.
• Finishing/packaging are v. imp. whether API or Formulation – snow white,
not off-white!
10

26. Future Opportunities
•The growth rate of generics subset of the market has been increasing
over the past three years and this trend is projected to continue. Govt. is
pushing for increased usage of generics due rising healthcare cost.
•Govt. aims to increase usage of generic drugs to 30% by 2012.
•The Japanese Generic market being backed by the Govt. This is
encouraging growth by relaxing registration procedures and providing
incentives to doctors to prescribe generics.
•PMDA has set the goals to reduce review time for priority, standard and
generic drugs.
11