Wayne Koberstein, a 25-year veteran of the publishing industry, is editor-in-chief of 

 Editor, he has overseen the emergence of the magazine as the leading business and marketing publication for the global pharma industry. He has interviewed and profiled more than 150 top executives in pharmaceutical companies, as well as major regulatory and healthcare leaders, around the world. Wayne has also directed the launch of numerous supplements and other ancillary business for the publication.

Wayne Koberstein

No greater challenge faces any writer than the empty page. To sully that beautiful white space with mere words can seem so arrogant, so pretentious, that one's urge is to leave it alone, in perfect blankness. To paraphrase an old writer's adage, just to begin may require lowering your standards-an act salvaged later only by careful editing.		

It has been my unique task and ultimate pleasure to face this empty page-and countless others-every month for nearly 17 years. Each time, my goal has been to fill this space with thoughts and ideas that resonate with the needs and interests of Pharmaceutical Executive readers. In that time, I've also written more than 150 cover stories, including Executive Profiles and special reports, to join all the other pages authored and edited by our outstanding staff. Now, at last, I face the last page in my stewardship of the magazine.	

As I relinquish the position of PE's Editor-in-Chief, I thank its owner, Advanstar Communications, for this opportunity to say farewell to you-the magazine's readers, advisors, managers, and staff. For a number of reasons, the time has come for me to leave PE in the hands of a new generation. It has been quite a ride-covering nearly three quarters of the magazine's life-since I inherited this position from former Editor Judee Shuler, now head of corporate communications at Eisai USA. She and a previous editor-in-chief, Suzanne Harvey, had already established a tradition of excellence in the editorial product. My aim, stated first in this space, was to "maintain and improve" upon that heritage.	

In time, with a succession of top-notch staff editors, I saw PE evolve into a not-to-be-ignored player in the pharma industry, one with a clear mission of leadership. Only when I was absolutely sure that we were fulfilling that mission did I inscribe it. For two years, we have published the mission, for all to see and judge, on our contacts page.	

Perhaps the ultimate example of the mission in action was our "Discovery!" series, which last year won the Oscar of business publishing, the Grand Neal. But the same directive has also driven all aspects of the magazine. This year, for "best single issue," PE is again in the running for the Neal, to be announced this month.	

Wishing the best of luck to the current PE team, I say farewell but not goodbye to all my friends who read this column. Thank you for all your help and support through these many years.	

So, why am I leaving? Partly because I've always aimed to end my tenure when the magazine had reached a pinnacle but still had plenty of growth potential-and long before I grew bored with it. All three conditions now apply.	

But be assured: My departure is a renewal, not a retirement. Truly, I wish to take on adventurous new assignments and roles that make sense in light of my interests and experience. 	

Another reason for leaving: I have never been able to seek other challenges while still engaged with the magazine. I can now explore opportunities that challenge me more, not less, than past endeavors. Yet, here, my final page as PE's chief editor is filled. And this hand, having written, will move on.	

Articles

No greater challenge faces any writer than the empty page. To sully that beautiful white space with mere words can seem so arrogant, so pretentious, that one's urge is to leave it alone, in perfect blankness. To paraphrase an old writer's adage, just to begin may require lowering your standards-an act salvaged later only by careful editing.

The Blank Page

The product still in naming, a potential Big Pharma partner, and a foothold field force in North America-those were the works in progress when we toured Eisai Co.'s headquarters and operations in Japan a few years ago.  	

(See "Eisai's Haruo Naito," PE, July 1996.) Now PE visits the company's US headquarters in Teaneck, New Jersey, for an update on its rapid growth in the world's largest market.	

In 1996, in partnership with Pfizer, Eisai carried out its first major US launch-for Aricept (done-pezil), still the leading therapy for Alzheimer's disease. Since then, Eisai has used the product as its main anchor in the United States. In turn, its US subsidiary Eisai Inc. is playing a major role in building a global base for the Japanese company.	

Combining its traditional go-it-alone philosophy with practical partnering, the company is constructing facilities and creating new jobs at its Teaneck, NJ, headquarters and formulation research and production site in Research Triangle Park, North Carolina. An affiliated basic research operation, Eisai Research Institute, is located near Boston. In 2002, with a sales force of 250, Eisai passed the hallmark of $1 billion in US sales-"only the fourth US pharma company to do so in five years or less," it says proundly. Eisai Inc. began 2003 with an ambitious two-year plan to more than double its US force. 	

Soichi Matsuno, chairman and CEO, and Bill Sheldon, president and COO of Eisai Inc., tell a determined story of the growth strategy for the US business. (See "Converging Paths," page 42.) They describe how the business surpassed "one-hit-wonder" status to turn itself into an integrated specialty pharma company in the United States in record time. 		

In 1999, two years after taking Aricept to the US market, Eisai Inc., with its co-promotion partner Janssen Pharmaceutica, launched another major product, Aciphex (rabeprazole) for erosive gastroesophageal reflux disease (GERD). It also has a pipeline with expanded indications for Aricept and Aciphex, as well as new compounds for cancer, sepsis, and stroke. (See "In the Pipeline," page 40.) Together, Matsuno and Sheldon share details of the Aricept campaign, including a huge senior-care manual produced with the advice of AARP and other associations, along with further actions and plans for building up Eisai's reputation, products, and operations in the United States, all-as the company likes to add-in record time.	

Eisai Co. has a long history in Japan but a relatively short one in North America. Only with FDA approval of Aricept in 1996 did the company move beyond research to build its own business organization in the United States. At that point, it braved cultural challenges and a new competitive environment to become a significant player here. But the company has made impressive strides since then.				

Matsuno gives credit where it is due: "Aricept is a driving force for Eisai," he says. "It's at the top of our strategy for realization of the business in this country. With that product, and newer ones, we want to build our US sales and marketing organization."	

Despite the go-it-alone instincts of the Naito family founders, partnering became a means to that end, according to Matsuno. "Eisai wanted to build a company in the United States, but doing so alone would take a long time. We knew that we might lose the opportunity or a competitor might come from behind. We wanted to buy time, so we decided to look for a partnership. We were lucky that we chose Pfizer as our partner." 				

He observes that earlier research contacts and Eisai's desire to obtain the benefit of Pfizer's tutorship informed its choice. "We wanted to learn about doing business in the United States," he says. "And we wanted to learn from the best of the best." Matsuno also says that previous personal experience with Robert Neimeth, former president of Pfizer International, helped seal the deal.	

Sheldon adds another factor: Pfizer would not dominate the partnership. "We conceived a strategy that we were 50–50 partners, that we would create a virtual company between our two organizations that would be in charge of Aricept across all functions. And there would be equal numbers of Pfizer and Eisai people who would make decisions as a team. We have done that successfully, making sure that both companies have a powerful vested interest in the outcome."		

Although the Aricept co-promotion served Eisai Inc.'s purpose well, the US unit quickly moved on to the next realms of integration even as it established new marketing alliances. Five years ago, it built a plant in Research Triangle Park to produce Aricept, theretofore imported from Japan or supplied through contract manufacturing. Eisai expanded the plant's size in 2000 by nearly a third, and a current expansion will make it double the size of the original. When that is completed, the facility will supply all US demand for Aricept and Aciphex. It currently also conducts formulation research to produce batches of products in development for use in clinical trials.				

In January 2003, Eisai announced a 60 percent boost in its US sales force, hiring 150 new reps by spring and aiming for a force of more than 500 strong over two years. As a chief reason for the growth, the company cited its desire to increase its role in the promotion of existing products and to independently market future products it develops or licenses from other companies.	

Still requiring greater marketing muscle for Aciphex, in 1997 Eisai again made the pragmatic and logical choice of Janssen as a co-promoter because of its expertise in the gastrointestinal market. Sheldon gives the subsequent alliance high grades: "It has been run on the same partnering principles as our relationship with Pfizer-both parties are heavily involved in the product's welfare."	

Matsuno considers both partnerships epitomes of his company's good fortune. "We found two unique, gigantic, textbook-type leaders: one, the New York City-based Pfizer; the other, the diversified, New Jersey-based Johnson & Johnson [Janssen's parent]," he says.	

As Eisai Co. entered into those alliances, it also invested in its core research and manufacturing functions-Eisai Research Institute in Andover, Massachusetts and Eisai Inc.'s production plant in Research Triangle Park. Matsuno emphasizes that the company bought rather than leased the respective properties and built its own facilities from the ground up. "In both cases, Eisai Co. wanted to buy a piece of property and build there because of the company's long-term commitment to the US market," he explains. "It's a gamble to build and start a manufacturing facility. But it was worth the risk." 	

Eisai's independent approach hardly offers comfort to the industry's outsourcing supporters, especially in manufacturing. But Sheldon explains that the philosophy is essential to the company's sense of responsibility: "We've tried as quickly as we can to take over the manufacturing and packaging of our products, because we do want high quality. It means a lot to us. It's one of our values. Therefore, I would say we want control." Eisai also assumed all US distribution of Aricept in January 2003.	

Sheldon notes that Eisai's independence impetus extends to all the functions of an integrated pharma company, reflecting the Eisai model in Japan: "We want to play a strong role in marketing strategy with our partners, and we want to play a powerful role in how all of our products are produced."	

For that reason, he says, from the beginning the company focused on recruiting people who could help construct a high-quality integrated US organization: "During the past eight years, we have hired people who add those values and skills to the company. The positions are more knowledge-based. We wanted to recruit the knowledge we needed to build a fully integrated pharmaceutical company. That's where we have invested-in R&D, marketing, sales, and production. We've worked very hard at that and we've succeeded."	

To every rule there are exceptions that prove it. As Eisai expands internal clinical development, it still uses contract research organizations (CROs)-though with the plans and protocols under its strict control. Eisai sometimes conducts its own backup studies, and ts biometrics group does all the company's statistical data analysis.				

Also, in expanding and integrating its R&D, the US unit has reached a global threshold. Last year, Eisai Inc. spun off the US clinical development operation to become a separate entity, Eisai Medical Research, headed by Mindell Seidlin, MD. It now works in collaboration with Eisai's research centers in Japan, London, and other places around the globe.	

"We have several products in development, all designed to be global," Sheldon says. "Therefore, we may conduct a single trial, but we will do it in Europe, Scandinavia, Australia, and the United States." He says the move realizes Eisai Co.'s long-term dream to globalize its R&D. 	

R&D globalization is another hallmark, according to Sheldon. Eisai can now move beyond explosive US growth to a global strategy as a "specialty" drug development company. "All of the compounds coming next in our pipeline are specialty products in neurology, oncology, GI, or acute care-sepsis and stroke," Sheldon explains.	

"Our sales force is designed to meet the needs of our specialty focus. We will continue to partner, because partnering is something we're good at. But along the way, we're going to build a more independent capability to manage our business." As an example, he cites Eisai's April 2002 agreement to acquire exclusive US rights to promote Pfizer's Cerebyx (fosphenytoin), an anti-convulsive treatment for epilepsy.	

Matsuno restates the strategy in philosophical terms that makes it clear Eisai does not quite fit the emerging specialty model. "Our mission is to provide good medicine to the patient as efficiently as possible. Each time a new product comes into our pipeline, we can develop it by ourselves or decide to partner. Eisai has a unique business model."	

Fortunately for Eisai, as it grows to whatever size it may attain in time, its first two products will enjoy extended lifecycles. Aricept will remain on patent until 2010. The Aciphex patent expires in 2013. during that time, the company will continue to develop new indications for both. In September 2002, Eisai submitted an NDA for Aricept in treating vascular dementia, which accounts for about 30 percent of dementia cases worldwide-compared with 60 percent caused by Alzheimer's and 10 percent by Parkinson's and other conditions. It also has Phase III clinical trials underway to study Aricept for the treatment of "severe" Alzheimer's.				

Development of Aricept has also continued with numerous post-marketing studies into short- and long-term results, including customer-driven questions of cost-effectiveness, caregiver burden, and delay in delivery to nursing homes. Several studies asked for both physician and caregiver assessments of patient progress.	

Eisai's research into Alzheimer's has led to more general insights into senior care. With AARP and other organizations as advisors, Eisai assembled such knowledge into a thick but easy-to-use training manual called "Caring to Help Others." (See "Caring, the Book," page 44.) Used by community-based organizations to train volunteers to assist primary caregivers, the award-winning training program also has obvious public relations and marketing value for the company, Aricept, and any subsequent product for the senior audience. 	

Aciphex is a late entrant in the proton-pump inhibitor (PPI) class, but Eisai believes the product shows advantages over others. Previously approved for erosive and symptomatic GERD, Aciphex was cleared by FDA in November 2002 as part of the first seven-day treatment for H. pylori infection, the most common cause of peptic ulcers. Taken in combination with antibiotics, Aciphex can treat H. pylori in up to half the time of current treatments. 	

"Aciphex has done very well," Sheldon says. "In fact, it surpassed Aricept in sales, and it will soon become our first $1 billion drug."	

Eisai and Janssen have focused on detailing and educational symposia to highlight the product's advantages-with success out of proportion to their size, Sheldon believes. Against a large field of competitors, some with giant sales forces and DTC budgets, Aciphex has won about a 10 percent market share, he says. 	

Partly by design, partly by history, Eisai has focused nearly all of its research on four therapeutic areas: neurology, GI, oncology, and acute care. But Matsuno demurs from calling them franchises; mainly, because the focus is of such recent origin. Only neurology and GI were deliberate strategic choices when the company sharpened its research aims four to five years ago, according to Matsuno.				

Aricept, he says, forced the issue of neurology. GI promised to have more commercial value than scientific potential and-with Aciphex capping a series of Eisai discoveries in the area-seemed too important to leave behind. Oncology arose by virtue of several discoveries in Eisai's global R&D program. Six compounds are now in development, ranging from preclinical to Phase II. Critical care evolved from the company's 15-year research into sepsis, the dedicated purpose of the Andover center, and has produced a second-generation compound now in Phase II.	

With the sepsis product and some oncology candidates employing new technology such as angiogenesis, Eisai has assumed a high level of difficulty-and the associated risk. But Sheldon argues that those areas fit perfectly into Eisai's mission of "human healthcare," which seeks to balance commercial growth with medical need.	

"Some of these products-for sepsis, stroke, restenosis, and cancer-are tough to develop," he says. "One way we can try to make them more successful is to hire the best people we can get and let them do some pretty avant garde science."    				

Besides Lilly's Xigris (drotrecogin alfa), the only approved treatment for sepsis, the road to success in that area is littered with casualties. Eisai's E5564 is a second-generation endotoxin antagonist. "It works a little differently than Xigris, which targets the latter part of the septic cascade," Sheldon says. "We believe our product works at the beginning of what happens when people get sepsis."	

"It's a very big molecule, requiring complex chemistry," Matsuno adds. "It's quite difficult to produce." Sheldon explains that the company's analytic research group has made good progress in reducing the number of steps required to produce the molecule. "Now," he says, "their job is to get that down to 16 or 18 steps so that we can produce it in commercial quantities. And they're making progress." 	

Although the compounds in Eisai's pipeline came exclusively from its own research, the company continues to seek new products through licensing, acquisitions, and even partnerships when appropriate. Sheldon says Eisai Inc. has recently begun to build up its business development group to look for those opportunities.	

Having attained most elements of full integration, Eisai Inc. operates without daily supervision from Tokyo. Matsuno believes it enjoys an unusual degree of independence compared with other Japanese companies in the United States. Once Eisai develops a plan or strategy for the US unit, he says, the home office keeps its eye on results rather than the daily details.				

President Naito travels to the US office periodically, but according to Matsuno and Sheldon, his visits are far from stressful checkups. Naito mostly comes to interact with employees and discuss progress in general. He and the employees say they even find the exchanges "energizing."	

Matsuno maintains that the same spirit of delegation holds for company management as a whole. "Our parent has a pretty long-term focus. And they don't give up on it. That helps, because it gives us time to achieve long-term goals. It's a good relationship."	

Tokyo's measure of trust in the US unit reflects its reliance on the US market for future growth. Already its US sales equal 37 percent of worldwide revenue. Only four years ago, the figure was 21 percent. Matsuno says it took 30 years for Eisai to reach $1 billion in sales-a goal that the US unit accomplished in five.	

At that rate, how much longer will it take for Eisai's US unit to dominate the entire company or at least profoundly alter its Japanese character? Matsuno and Sheldon hint that the answer may depend on how the US business defines itself. Sheldon has charge of a "vision" campaign that may depart from the traditional Japanese model but is in keeping with Eisai Co.'s goal to globalize.				

"We'll continue to be a partnering company," he says. "That's a core strength. We're building an independent capability alongside so we can partner when we choose and go alone when we choose."	

A goal of doubling sales within the next five years means any strategy must accommodate rapid growth-with new employees coming from a variety of companies and cultures in the New Jersey area and beyond. When PE visited Eisai in Japan five years ago, intercultural exchange was still primarily an external challenge. Now and in the future, the challenge is internal.	

Matsuno appears to have no fear of that future: "My aim is to make the United States the number-one market for Eisai."	

Tne product still in naming, a potential Big Pharma partner, and a foothold field force in North America-those were the works in progress when we toured Eisai Co.'s headquarters and operations in Japan a few years ago.

Eisai Rises in the West

First, slice the political sausage into thin cross-sections, throw in your favorite exploding spices-issues nobody can agree on-and mix thoroughly. Then stir fry with vegetables-or rather, plants, as in the conventional, biological, chemical, and nuclear weapon variety. Add age-old staples like cultural and religious hostility, territorialism, poverty, disease, and ignorance. And, if your tastes tend toward the new and exotic, fold in a little faux cloning and junk science at the end. Finally, put the whole ensemble over a slow but searing flame: the endlessly burning cycle of brutality and revenge, terror and war. It's this year's wintertime stew-an international dish sure to keep you warm on the coldest nights.        

So what does that have to do with the price of pharmaceuticals? (You ask.) Three critical hot spots: public opinion, healthcare costs, and scientific innovation. And that's just for starters; countless ingredients of the industry's competitive base will bubble and churn along with the wider turmoil.	

Public opinion has seldom seemed positive to industry partisans. Some simply dismiss the situation as hopeless; others gush with so much goodwill they scare people. Most industry insiders would rather have a positive image than a negative one-if only for the sake of peace at family picnics. But war and world upheaval will push companies toward more secrecy just as they were learning to become publicly transparent. Rx prices, already under fire, will feel greater heat from the general expectation of universal sacrifice in time of war. Even the slightest appearance of selfish behavior will stand out in stark relief. All companies, like all individuals, will have to do their duty. That means relieving human suffering on all fronts, with less leeway for big profits.	

Healthcare costs will only rise on a steeper curve in the wartime environment-despite increased use of "cost-effective" pharmaceuticals. In the US market, where Rx prices have traditionally ranged free, customers will demand that industry share some of the growing burden. From regional HMOs to state–government alliances, customers are taking pharma, the stock market's favorite bull, by the horns to force its prices down.	

Scientific innovation faces several dangers, despite some opportunities, in this winter's harsh stew. Though some US companies may prosper from an infusion of federal dollars into counter-terrorist research, the price of secrecy may be to impede the same and other research. Much of the cutting-edge science now under potential government purview cradles the next generation of medical breakthroughs. Early US resistance to, and misconceptions about, therapeutic cloning of stem cells-similar to how the country first reacted to in vitro fertilization-may impose further delays on innovation. You can't keep justifying high prices with breakthroughs that never materialize.	

To the question of how this stew of events and issues affects the industry, there is an 	underlying answer: We all feast from the same kettle. This season, we're not just feasting; we're swimming in this war-fired stew. Everyone, even the industry, must adapt to the 	soup du jour-or risk drowning in the brew. 	

We all feast from the same kettle-and this season, we're not just feasting; we're swimming in a war-fired stew of events and issues.

Wintertime Stew

Don't try this at home. That ought to be the common lesson we draw from most examples of pharma's current performance in the public arena. Despite a series of political victories, the industry seems to save its most ill-favored face for the general populace.	

A year that began with a pledge by companies to help fight worldwide disease and terror now ends with a queue of self-defensive gestures by PR-stricken executives. From newspaper reports to TV specials, from commentators throughout the political spectrum, criticism hits the industry on a near daily basis. Yet answers from industry emerge awkwardly or not at all. A mere handful of companies may stand in a negative light at any moment. But when even one company speaks, the public hears the industry's voice. And when a single company stonewalls, the public senses deception in all.	

Still, the New Year demands a more positive proclamation-something that raises morale even as it implants realism. Resolutions do just that, though they also create internal standards perhaps loftier than any external actor could impose. Thus, for the new year of "ought three," here are a few "oughts" for the industry-principled actions to which companies and executives might well resolve themselves:	

Listen to your greatest fans, and your worst critics-patients. Okay, people can often seem blind to your products' value and downright superstitious in their belief in alternatives. They can also organize, educate, and focus on their conditions in the most sophisticated ways, sparking great opportunities for treatment breakthroughs and alerting companies to competitive advantage. Reject the one, and lose the other. You might as well accept patients for what they are. Then, listen closely, consider carefully, and respond constructively.	

Make friends with the media. Companies reflect the personalities of their top executives, and most executives in this industry seem especially media shy. Perhaps they've bought all the stories about the "liberal" press and so give up before they even start. Some bypass the business press as well. Journalists are generally more curious than critical, but if you stonewall them, they'll only dig deeper.  	

Consort to address common issues. When one company stumbles, it must right itself. When the entire industry falls from grace, at least it has an association or two to defend it. But when a segment of companies runs into trouble, it's a free-for-all; no mechanism for dealing with the matter exists. Companies under a common threat-such as the latest furor over diuretics versus other antihypertensives-make natural allies but must carefully avoid antitrust issues. In an independent, even temporary, consortium they may find more cohesive ways to respond.	

The foregoing "resolutions" all boil down to a simple algorithm: Listen, Relate, and Act. They also imply deeper principles of effective communication. If something makes you feel either defensive or offensive, look for a third alternative. Avoid dividing the world into saints and sinners. Internal lessons follow as well: When hiring, seek the sincere, though imperfect, candidates who will contribute ideas as well as follow policy. Temper theory with reality-allow the stars to shine among the teams.	

Some problems defy solutions, but that doesn't mean we should stop thinking about them. Perseverance furthers. And in this world, a resolution is better than no solution at all.	

Don't try this at home. That ought to be the common lesson we draw from most examples of pharma's current performance in the public arena.

Author | Wayne Koberstein

Articles

The Blank Page

Eisai Rises in the West

Wintertime Stew

Resolutions