Research and development in Japan's biotechnology industry is undergoing a quiet but profound reorganization as a result of the huge success of two new drugs made with genetic engineering technology. In response to the success of interferon and erythropoitin, companies are reorganizing their research to focus on pharmaceutical applications of biotechnology which are now seen as being more profitable than other areas, such as fine chemicals.
The recession in Japan and the recent victory of a U.S. company in a patent dispute in Japan's courts is also causing companies to reassess their involvement in biotechnology R&D.
Sales of interferon, once thought to be a possible miracle cure for cancer, soared to over $1 billion last year after the dug was approved for treatment of a type of viral hepatitis common in Japan. The success of interferon comes on top of booming sales of another recombinant DNA drug, erythropoitin (EPO), used in the treatment of kidney failure. These two drugs alone now account for more than one-third of Japan's $5 billion biotechnology market, and their sales continue to rise rapidly.
In the early 1980s, Japan's fledgling biotechnology industry poured money into the development of interferon in the belief that the drug might provide a cure for cancer. Most of the interferon production technology was licensed from U.S. and European companies, but some Japanese companies developed their own unique production techniques. Among them is Hayashibara Biochemical Laboratories Inc., which mass produces interferon in millions of mice with cancerous tumors. The tumors are crushed to extract the interferon.
Interferon did not turn out to be a wonder anti-cancer drug. It has only been approved for treating a few limited types of cancer. However, it does seem to be effective in the treatment of some viral infections. And early last year, Japan's Ministry of Health and Welfare granted approval to several companies to use their interferon in treating chronic hepatitis C.
Sales of the drug skyrocketed overnight to over Y10 billion ($85 million) a month because there are over a million people in Japan infected with the hepatitis C virus and tens of thousands of them show chronic symptoms of liver infection. Producers cannot keep up with demand for the drug despite the fact that a course of treatment with interferon costs millions of yen (tens of thousands of dollars), side effects can be severe, and only 30 to 40 percent of patients benefit from the months of treatment that are required.
Leading the pack of interferon producers is Sumitomo Pharmaceuticals, which licensed cell culture technology from Britain's Wellcome Plc. Sumitomo is well placed to meet demand because the company has three of the largest bioreactors in the world to mass produce the drug. Other companies are using recombinant DNA technology licensed from U.S. companies. And Hayashibara is waiting on the sidelines for approval to use its mouse-produced interferon in treating hepatitis C. …