Japanese companies traditionally have relied upon partnerships with US companies to mitigate their risk. Has this strategy
I'm not sure. There's always the risk of whether you're going to have a good partnership or not. Under that, there's a risk
that priorities can change, that the partner will be taken over by somebody else, that the contracts are not perfect. And
there's a risk of the deal not going exactly the way you thought it would because of your loss of control over the development
of the product.
A company that develops a drug on its own has more control and keeps all the profit. But there's a risk that it may not have
enough experience to get the most out of the product. However, in the United States, where there are lots of good contract
sales organizations, companies can mitigate that risk by putting a virtual infrastructure in place. Then, if the product doesn't
sell well, it can dial down the sales and marketing investments.
In the specialized areas, it's less risky because companies with small sales forces still can reach the majority of the large
How have the lessons learned about partnership changed the business models of Japanese companies?
The Japanese companies have been pretty successful when they've struck out on their own. They took the first step in partnering
because they needed to learn. But those arrangements didn't always work out quite the way they would have liked—that's the
nature of doing deals.
Now the later entrants from Japan into the United States can maybe skip that step and learn from their countrymen. You see
that happening with the larger companies—certainly Takeda and Eisai—and it's trickling down to the medium-sized companies
like Kyowa. But it remains to be seen whether partnering is a necessary step to get into the US market.
Looking forward, what types of deals do you think will work the best?
I think the Roche/Genentech model, where the biotech retains a lot of freedom and entrepreneurship, makes sense because it
leaves all the right incentives in place for the biotech to succeed. I'm amazed that it hasn't been copied more, but it probably
speaks to a company's reluctance to give up control of drug development.
I also think discovery will continue to become more specialized, and remain outside the traditional scope of Big Pharma. On
the other hand, big companies will continue with their competency and focus on drug development.
Joseph Brindisi is general counsel and vice president of business development at Kyowa Pharmaceuticals. He joined the company from Johnson
& Johnson, where he was executive director of worldwide licensing and acquisitions, and also served as a senior patent attorney
working across J&J's pharmaceutical, medical device, and consumer businesses.