But this process of building consensus is very important. Our project teams don't come to management and ask, "Should we do A, B, or C? What indication should we pursue? What do we do about some toxicity problem? What kind of dosage form should we have?" They say, "We've reached a consensus. This is what our global team recommends." Once that decision is made, there's not a lot of reworking. Teams don't come back the next month and say, "Oops, there's a new problem we didn't think about." It's hard for those teams to do that, but there's rarely any disconnect with management. Very few things are turned down at that level.

Those teams also are able to reach a consensus that the product isn't worth developing anymore—I haven't really seen any team in Western companies be able to do that.

What is the key to integrating the companies' research functions?

But Japanese companies have to be truly global, with representatives from Japan, Europe, and the United States. That means, at least initially, there has to be a lot of face to face in order to build the relationships. After that, we can use e-mail, videoconferences, and teleconferences. But the relationships must come first. I know when I started, the language and the time differences made the video conferences and teleconferences ineffective. One of my bosses said one face to face was equal to ten video conferences, which was equal to 100 teleconferences.

So the US executives visit Japan. But how can employees bond in such a short timeframe?

In the Japanese business culture, dinners are a very important bonding opportunity. While business issues are not usually discussed directly, they can lead to trust and understanding. I often say the quality of our business dinners is the secret of the success of our integration.

Companies often merge to gain products. But some analysts say Sankyo's pipeline overlaps with Daiichi's and will cannibalize sales.

From the R&D perspective, we think that the overlap of therapeutic areas is a strength. It makes our core areas truly competitive. We do have several compounds approaching development in the same class. We will be charging our teams with the task of selecting the best one to recommend to the management for continued development, based on the attributes on the compound and not its origin. I actually proposed renaming all of the codes to "DS-" so we could forget the origin of the compound. And as the research groups are consolidated, we will be able to reduce further conflicts within the same therapeutic areas.

What do you see as the biggest synergy between the companies?

Daiichi was a smaller company, and commercially, it had few products in the US market. It had no presence in the European market on the commercial side. But I think the company brings a similar heritage—a 100-year-old history in the pharmaceutical business. It's a very similar history as Sankyo.

Our president, Mr. [Takashi] Shoda, wanted to merge with a Tokyo-based company because he thought some of the cultural differences could be minimized with a company in the same town. That turned out to be quite true.