Japan-US Business Report LogoJapan-U.S. Business Report

No. 340, January 1998

Issue Index

Japanese Companies in the US


The worldwide consolidation going on in the agrichemicals market and the need to reduce its debt persuaded ISHIHARA SANGYO KAISHA, LTD. to sell its Mentor, Ohio- headquartered ISK BIOSCIENCES CORP. subsidiary to ZENECA GROUP PLC. The main business of ISK Biosciences is the production and international sale of the fungicide chlorothalonil. Marketed under the trade names Bravo and Daconil 2787, it is used on a wide range of crops and on turfgrass. Included in the transaction, which is valued at $410 million, is the company's manufacturing facility at Greens Bayou, Texas, near Houston. Ishihara Sangyo bought what became ISK Biosciences in 1990. That company, which employs about 500 people, had an operating profit of $43 million on sales of $240 million in 1996. For an additional $90 million, Ishihara Sangyo also agreed to sell to Zeneca, the world's third-largest producer of crop protection and plant science products, distribution rights outside Asia to four of its recently introduced products, including a broad-spectrum nematicide, a fungicide and two herbicides.

One of the first Japanese companies to manufacture in the United States, SEKISUI CHEMICAL CO., LTD., has opened a center near Boston to research and develop new materials for plastic foam. The International Foam Technology Center expects to commercialize its first products sometime after FY 2000. To that end, it plans to collaborate with the Massachusetts Institute of Technology and other nearby universities as well as research organizations. Sekisui Chemical makes polyethylene foam sheets at plants in Lawrence, Massachusetts and Coldwater, Michigan that it acquired in 1969.

Under a three-year arrangement, Kobe-based INTERNATIONAL REAGENTS CORP. contracted with THIRD WAVE TECHNOLOGIES, INC. to develop nucleic acid-based diagnostic tests for specific infectious diseases. IRC, already one of Japan's biggest suppliers of infectious disease diagnostic products, will provide up to $5 million in funding to the Madison, Wisconsin company. It has the option to extend the agreement for two more years in exchange for an extra $2 million. Third Wave Technologies' products enable users to acquire, analyze and manage genetic information more rapidly and cost-effectively. They are based on the firm's proprietary Cleavase enzymes, a family of structure-specific nucleases. Under a parallel pact, Third Wave Technologies gave IRC Japan import and distribution rights to CFLP (Cleavase Fragment Length Polymorphism), an alternative to DNA (deoxyribonucleic acid) sequencing for detecting and analyzing cancer-related genes, among other uses.

In an expansion of its already sizable U.S. commitment, EISAI CO., LTD. will spend $76.9 million or more by the year 2001 to build a new drug development research park in Andover, Massachusetts. The big pharmaceutical company already has a drug discovery research operation there as well as a pharmaceutical process development facility (see Japan-U.S. Business Report No. 332, May 1997, p. 2). Eisai also recently completed an integrated research and development/manufac-turing complex in Research Triangle Park, North Carolina (see Japan-U.S. Business Report No. 339, December 1997, p. 2). The Andover research park, for which land has been bought, and the other facilities, plus a pending increase in marketing personnel, are part of Eisai's strategy to boost international sales, particularly in the United States.

Sometime this year, EISAI CO., LTD.'s Teaneck, New Jersey subsidiary will submit a new drug application to the Food and Drug Administration for Pariet (sodium rabeprazole), a proton pump inhibitor for peptic ulcers, including gastric ulcers and duodenal ulcers. Pariet is the second of what Eisai considers to be its global strategic products. The first was Aricept, a drug for the symptomatic treatment of mild to moderate Alzheimer's disease. A JOHNSON & JOHNSON affiliate will copromote Pariet with Eisai in the United States and in certain European countries.

Facing pricing pressures at home like other pharmaceutical companies, TAKEDA CHEMICAL INDUSTRIES, LTD. is joining its rivals in trying to expand business in the United States, where the clinical testing and the approval processes are quicker. Japan's top drug manufacturer has formed a holding company in New York City to improve the efficiency of its development and marketing efforts. Under the holding company's umbrella are TAKEDA AMERICA RESEARCH AND DEVELOPMENT CENTER INC. of New Jersey and TAP HOLDINGS, INC. The latter is a 20-year-old, equally owned venture between Takeda and ABBOTT LABORATORIES.

MEIJI SEIKA KAISHA, LTD. has awarded to TAP HOLDINGS, INC. American and Canadian development, manufacturing and marketing rights to Meiact (cefditoren pivoxil), an oral cephem antibiotic that it has sold in Japan since 1994. Deerfield, Illinois-based TAP Holdings already has started clinical trials of the antibacterial. It expects to apply to the Food and Drug Administration for marketing approval by late 1999.

The FDA has approved for marketing Omnicef (cefdinir), a broad-spectrum cephalosporin antibiotic for adult and pediatric use. FUJISAWA PHARMACEUTICAL CO., LTD. licensed the drug to WARNER-LAMBERT CO. The Morris Plains, New Jersey company's Parke-Davis Research division developed for it for U.S. use. Omnicef is the largest-selling cephalosporin in Japan. U.S. marketing of URSO (ursodiol) — a treatment for primary biliary cirrhosis, a debilitating, even deadly, liver disease — should start shortly. TOKYO TANABE CO., LTD. developed the drug. A joint venture between AXCAN PHARMA US INC., the American subsidiary of a Montreal-headquartered company, and SCHWARZ PHARMA, INC. of Mequon, Wisconsin will handle U.S. marketing. The FDA granted URSO Orphan Drug status. It is the only available treatment for PBC, which afflicts mostly women.

The FDA has cleared marketing of Floxin Otic (ofloxacin otic), the first new antibiotic eardrop to be approved in more than 20 years. The topical quinolone also is the first drug developed by DAIICHI PHARMACEUTICAL CO., LTD.'s Fort Lee, New Jersey subsidiary, which also will market the product. Daiichi Pharmaceutical is known for its work on quinolone, especially the discovery of ofloxacin and levofloxacin, which are marketed in the United States by the Ortho McNeil Pharmaceutical division of JOHNSON & JOHNSON.

The lone U.S. drug contract research organization owned by a Japanese company is changing hands. KURAYA AMERICAN SYSTEMS, INC. of Torrance, California, a subsidiary of drug wholesaler KURAYA CORP., has agreed to sell IBRD-ROSTRUM GLOBAL, INC. to Montreal's PHOENIX INTERNATIONAL LIFE SCIENCES INC. for $28.5 million. Irvine, California-based IRG, which specializes in Phase II through IV clinical research, reportedly has made no money since Kuraya acquired it in 1990, even though revenues totaled about $39 million in 1997, for example. Kuraya calculates that it will have a net loss of about $29.5 million on its IRG investment.

MITSUI MINING & SMELTING CO., LTD. has established a technical and marketing collaboration with RODEL, INC. of Newark, Delaware to bring high-grade cerium oxide products to the chemical mechanical planarization market worldwide. The Japanese partner is the exclusive supplier of specialty cerium oxide for Rodel products, the first of which, a slurry for shallow trench isolation polishing, is set for full commercial launch this year. In Japan, marketing will be handled by Osaka-headquartered RODEL-NITTA CO., an equally owned venture with NITTA CORP. that has manufacturing facilities in Nara and Mie prefectures and was the first company to offer locally made commercial CMP slurries.

An exchange rate of ¥130=$1.00 was used in this report.

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