Yoshihiko Hatanaka, President and CEO, Astellas
International media, such as the Financial Times or the Economist have questioned the implementation of the third arrow of Abenomics, however we have seen several reforms take place in the defense, agriculture and tourism sectors. In your sector, we have seen the introduction of the Japan revitalization plan closely linked to the health sector to increase productivity and the life span of the Japanese population. Abenomics has also revised the Pharmaceutical Affairs law, how did this affect the pharmaceutical industry as a whole?
I believe there are three elements that possibly impacted the pharmaceutical sector. The first is the “Sakigake” package, which is very system to breakthrough therapy designation in the U.S. and the Priority Medicines (PRIME) scheme in the European Union. This “Sakigake” system is encouraging innovation and early access for patients. The second area is regenerative medicine, an area where the government is encouraging innovation. The third area is the establishment of the Japan Agency for Medical Research and Development (AMED). AMED promotes integrated research and development in various fields of medicine, from basic research to clinical trials – establishing and providing funding for an environment for integrated R&D through practical application. It is also promoting collaboration between academia, the public and the private sector. These are the positive outcomes that are coming from the revitalization plan in which the government is promoting innovation as a key strategy, especially in the healthcare sector.
The increasing aging population is putting pressure on government healthcare expenditures in the country. Currently, the population over 65 years of age constitutes ~26% of the total population in Japan, and it is expected to increase in the near term to reach 40% by 2050. Which are the consequences of such phenomena and what opportunities do you see arising from it?
Clearly Japan is one of the first countries facing an aging population. My hope is that with all the effort that is being put into healthcare innovation and if we are able to manage this situation, we will be able to send a strong message and can show a model for managing a sustainable aging society. We, the Japan Pharmaceutical Manufacturers Association (JPMA), have launched our Vision “2025,” which articulates the aspiration of Japanese pharmaceutical companies to drive next-generation medicines through advanced drug discovery, provide innovative drugs to people worldwide and support the creation of an advanced healthcare community.
As these aging society costs are expected to rise dramatically, how can this expenditure be kept under control?
This is a very challenging topic because this is not only Japan’s issue, all over the world stakeholders across the healthcare industry are facing the difficult task of keeping effective and sustainable healthcare at low costs. In Japan, the government has already begun a community healthcare initiative to help provide effective and efficient healthcare. Also, each sector has to work closely together and discuss how we can contribute to this plan. We, the pharmaceutical companies, until now have largely focused on the “cure” part, but now we must also consider the “care” part. Secondly, there is a major focus on early intervention in order to manage patient journeys in a cost effective manner. Lastly, we need to focus on better patient outcomes. We are currently making an effort by working closely with government institutions to accelerate use of real world data, meaning patient data for better patient outcomes and more effective resource utilization.
What are the major innovations that you have seen as a result of this paradigm?
Currently personalized medicine, which is closely related to patient selection by utilizing biomarker and companion diagnostics, is one of the major innovations. Most of the pharmaceutical companies’ products at the moment are developed with companion diagnostics to help detect or select the most beneficial solutions for the patient.
Our next step is to figure out how to provide access to our innovation and medicine all over the world. I believe this is our challenge. My hope is that when we develop an innovative product, whether we develop it in the U.S. or Japan, we would like to provide those benefits to each patient around the world.
Since its foundation, Astellas has been continuously evolving, adapting and helping to provide high quality drugs and pharmaceutical products. It has not only become a key player in Japan but also has been extremely successful and competitive internationally as well.
Could you walk us across through Astellas’ history and major milestones?
We were established in 2005 – during the 2000’s many Western pharmaceutical companies took part in mergers and acquisitions within their markets. We believed that at that time, a 1 billion R&D investment would enable us to better contribute to serving the needs of patients and be more competitive in the industry. With that in mind our aim was to achieve success in a very short period of time. In order to do so we decided to merge two Japanese companies with long history, Yamanouchi and Fujisawa. Due to that merger we were able to achieve the objectives we were looking for. The biggest achievement was that we could enter the oncology market with a substantial commitment and investment in research and development. In 2006, one year after the merger we decided to make oncology our core area of research. In 2007 we acquired Agensys in Santa Monica, California and in 2009 we reached development and commercial agreements with Medivation (later acquired by Pfizer) for enzalutamide, a cancer product. In 2010, in preparation for entry into a crowded oncology market in the U.S. we acquired OSI Pharmaceuticals in New York. And just last year we acquired Ganymed Pharmaceuticals in Mainz, Germany which specializes in late stage oncology research. These are our greatest achievements for cancer patients since Astellas’ establishment, and currently oncology remains a key focus area for research.
Astellas has been contributing towards improving the health of people around the world through the provision of the latest and most reliable pharmaceutical products. How are you planning to keep providing increased value to your patients and remain competitive in the market?
Well this is a very interesting question because many pharmaceutical companies are focused on oncology. In addition to that, we focus on other research areas. Of course there are limitations to working on all therapeutic area opportunities. Therefore, we are constantly reviewing our areas of focus based on our scientific findings. Our key fields at this time are oncology, immunology and urology. In addition to those, we have identified two new emerging therapeutic areas which are muscle disease and ophthalmology. There have been many new scientific findings and data is emerging almost daily in the new R&D areas. I believe it is very important that we do not only focus on current successes but also on the future ones.
In the same context of maximizing product value but focusing more towards one of the biggest causes of death worldwide, in other words, cancer, what research approaches have you adopted in order to remain at the forefront of the oncological sector?
Our approach is very simple, we are going to build a portfolio of novel research targeting the tumor microenvironment to address tumor types that are unresponsive to current PD-1 and PD-L1 inhibitors, which we publicly announced in December of last year. We understand that there has been a lot of research and advancement done in the oncology area; nevertheless, there are still many unmet medical needs that have not been covered. From this, we can clearly see that there is still great room for growth, allowing for further development and exploration.
Let me also highlight that first and foremost, we are working on a cure, however through the course of R&D and as I mentioned earlier, we will also focus on care as well.
Exploring opportunities in research for developing new drugs in new therapeutic areas is key for the survival of any company within the industry. Astellas has already started to accelerate research in fields such as regenerative medicine and cell therapy. How are you planning to keep innovating given such a fierce competitive landscape?
In areas such as cell therapy we are capable of developing it in our own research center – Tsukuba Research Center. At the same time, we acquired Ocata Therapeutics in Boston last year and it’s now called Astellas Institute for Regenerative Medicine. We are also working with other institutions to gain as much insight as possible, because this is an area in which almost every day progress is made. Japan should be the front runner in regenerative medicine research, hence we are cooperating with the public and the private sector in order to develop the latest technologies.
Astellas’ raison d’être is to contribute towards improving the health of people around the world. Certainly advances continue to be made in technology and medicine, however, there still remain barriers for many people who have difficulty accessing basic healthcare services. How are you contributing towards enhancing the availability of healthcare services within the sector and on which type of initiatives are you relying on?
This is also an interesting question because at the OECD Health Ministerial Meeting and even United Nations meetings, striking a sustainable balance between fostering innovation and ensuring access to such innovation is the main discussion topic. We are currently working with a research institution for neglected tropical disease (NTD). We are also participating in the development of pediatric drug formulations for Schistosomiasis. Another initiative that was implemented in January, in conjunction with more than 20 other pharmaceutical companies, is Access Accelerated, which is designed to advance access to non-communicable disease (NCD) prevention, diagnostics and treatment in low-income and lower-middle income countries. To help address NCDs, Astellas supports Action on Fistula, a program that has given over 2,000 Kenyan women with obstetric fistula life changing reconstructive surgery.
Furthermore, we are working with public and private institutions within the scope of an initiative called GHIT (Global Health Innovative Technology) Fund, the first public-private partnership of its kind in Japan. The GHIT Fund has been established to advance the research and development of new medicines, vaccines and diagnostics to fight NTDs such as dengue fever in the developing world.
As with most of the major companies in Japan, you cannot ignore the decreasing population of the country. Hence, Astellas is exploring external business opportunities through acquisitions, collaboration or in-licensing and is improving its balance of sales across the regions, including the number one healthcare market, the U.S.
What are your prospects of growth in the U.S. market and how are you planning to enhance your operations there?
Needless to say the U.S. is one of the world’s hubs for medical science, with the largest pharmaceutical market and strongest depth of scientific talent on the globe. Given our focus on innovative products, the U.S. has become our key market. In fact, currently we employ nearly 3,000 people in the Americas for R&D and commercialization. Our sales from this region accounts for 33% of our total revenue which we hope to expand and increase as a result of further business expansion.
In 2013 you announced a joint venture with Amgen, could you tell us more about this partnership?
This is a strategic alliance to provide new medicines to help address serious unmet medical needs of Japanese patients. There are two elements of this partnership that must be highlighted – the first element of the alliance is a long-term collaboration between the two companies that will focus on the co-development and co-commercialization in Japan of five Amgen pipeline medicines. The second element is the establishment of a Tokyo-based joint venture company through which both companies will work together to enable Amgen to rapidly build on-the-ground capabilities in Japan. Hence, we have a close collaboration and communication with the world’s leading independent biotechnology company.
As a company that is reinforcing its business worldwide and is bringing its products to market globally, what value do you bring to the U.S. market and how are American people benefiting from it?
I believe the innovative medicine that we have produced alongside the employment we have provided to the economy is very valuable to the U.S. society. Additionally, many of our partnerships, whether of a commercial or research nature, are based in the U.S.; hence as far as they are successful I do believe we can bring increased value to our American patients and customers.
In terms of know-how, technology and capital, what are your competitive advantages in the U.S. market compared to more established players?
The pharmaceutical market is highly specialized and divided by different technologies and therapeutic areas. We have established and further enhanced expertise within selected areas which allows us to compete with big companies. There are some interesting areas of this specialized market such as regenerative medicine and cell therapy. In fact, this is one of the top technologies we are working on. Even though we are a Japanese company and are a middle-sized firm, if we are smart and nimble enough to select the right target areas, I believe that it will give us a crucial advantage to compete with more established players.
Which is that target you are speaking of?
We have strengths within the urology and immunology areas. We are not solely reliant on our own scientific or development capabilities but also network with key figures in the industry. And of course the oncology area is another important area where we are competing with other players.
Which of Astellas’ products have you successfully introduced into the U.S. market?
The key products we have introduced in the U.S. include: enzalutamide, which is a treatment option for prostate cancer; the second is mirabegron for overactive bladder; and the third is regadenoson, a widely used pharmacologic stress agent. In addition, two years ago we launched isavuconazonium sulfate, a compound to fight certain invasive fungal infections.
We are in the field of innovative medicine; therefore, we are always looking for new creative R&D pipelines and sources of future growth. I tell investors that currently no single pharmaceutical company’s CEO is satisfied with today’s pipeline.
What has been your greatest achievement within Astellas?
For me it’s all about seeing the smiles on patients’ faces and their satisfaction with the product, especially when it contributes towards improving the quality of life of the people. That is why I enjoy working in this industry and that is my greatest achievement. My task is to give hope to patients, to society and to our employees.
What final message would you like to transmit to our International audience and of course all the readers of the Washington Post?
We do not think we are just a Japanese company, we think we are Astellas with operations around the world, and our goal is to turn innovative science into value for patients.