Pharm Exec Q&A: Japanese Wedding

May 01, 2006

Spring is one of the most beautiful times of the year in Japan. All along the country, the cherry blossoms are in full bloom—pink flowers so beautiful that throughout the country, viewing parties and festivals sprout up, drawing national attention and crowds of tourists.

John Alexander, MD, writes about this colorful scene from his hotel room. He retains his outsider's appreciation for it, having never lived in Japan. But he certainly spends enough time there: He's worked at Sankyo Pharma for seven years, and each month, he takes the day-long journey from New Jersey to the company's headquarters in Tokyo.

Fast Stats
But Alexander came to know Japan—and Sankyo, for that matter—long before he joined the company. It was 1985, and Alexander was working for Bristol-Myers Squibb. He had traveled to Japan to meet with Sankyo and secure a license to Pravachol (pravastatin), one of the first statins, which would later become BMS' biggest seller.

Back then, Alexander saw this as a major success for BMS. But today, working as the president of Daiichi Sankyo pharma development, he sees that licensing deal as symptomatic of the scale of Sankyo—it was simply too small to sponsor the major clinical development and marketing programs needed to realize the potential of that blockbuster. By licensing out drugs like Pravachol, and now prasugrel—a very promising Phase III compound co-developed with Lilly—Sankyo loses much of the value of its pipeline.

It couldn't continue to compete that way. So in September 2005, Sankyo announced its intent to merge with another Japanese company to form a new company, Daiichi Sankyo. On April 1, 2006, at the height of cherry blossom season—which has become synonymous with new beginnings—the new entity of Daiichi Sankyo was born in the United States. By next April, the companies expect the integration in Japan to be completed.

Critics have voiced their concerns. They say Sankyo had a more promising pipeline than Daiichi, particularly because of the anti-platelet agent prasugrel. They also say the combined portfolio can't justify the company's plans for growth. The two companies are just following on the heels of the Fujisawa/Yamanouchi merger to form Astellas, some critics say, without carefully considering the consequences.

The Language of Consensus Building
"On paper, looking at the merger and the way the two management teams talked it up, it looked like a reasonable plan," says Alex Grosvenor, a senior life sciences analyst with Wood Mackenzie. "Daiichi is a company that was very strong in anti-infectives and also had a growing cardiovascular portfolio, whereas Sankyo is Japan's leading cardiovascular company, and has some anti-infective products as well. So combining the two, you have a company with greater critical mass with more money to spend on R&D. But it soon became apparent that there are quite a lot of products in these two portfolios, and others, that are overlapping."

But John Alexander, with nearly 30 years of drug development experience, doesn't pay heed to the critics. Instead, he sees Daiichi Sankyo as a cardiovascular and anti-infective powerhouse, and is staying focused on what may be the most important task of a merger: the delicate art of integrating the research operations of two companies. Here, Alexander talks about the goals of the merger, the progress thus far, and shares insight into the development plans for prasugel.

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