Rx for Global Domination

February 7, 2007

Pharmaceutical Executive

Volume 0, Issue 0

Otsuka forms new strategic unit that will focus on development, commercialization.

Otsuka Pharmaceuticals, already one of the top-50 largest drug companies, is angling to become an international powerhouse--or at least get its remarkably far-flung act together--by deploying its pipeline globally rather than from region to region.

The Japanese company has formed a new division in Princeton, New Jersey, to focus on global strategic development and commercialization with the goal of lifecycle management. Once products are brought to market, that strategy will be executed on a local scale.

"Otsuka had traditionally focused on regional development and marketing," said Dean Haubrich, vice president of corporate management. "That turns out not to be a very effective or productive way to do business."

The new division will focus on a range of activities, from finding additional indications for a drug to global branding with "one trade name, one message, one label" no matter where a product is launched, according to Haubrich. "We can start planning for the commercialization very early in the development process," he said. "We view this as the engine that can generate new products."

Otsuka is not the first company to move to a franchise model in an attempt to beat the competition in tight primary-care fields. Such mighty firms as Pfizer and Merck have organized their companies around core therapeutic areas. Yet Otsuka's units operate as autonomous businesses, according to Haubrich.

The strategy also calls for pursuing new therapeutic areas. The company is hoping to submit a compound for congestive heart failure for regulatory approval in the United States later this year, and is also working on drugs for gastrointestinal, respiratory, ophthalmic, and central nervous system disorders.

The new division is the sum of the merger of Otsuka's Maryland Research Institute and the global development and commercialization unit. Unlike such divisions in other companies, it will operate independently of the rest of the company with its own executive structure. Kazumichi Kobayashi will serve as chairman and CEO, and Taro Iwamoto, as president and COO, of the new Princeton division.

"Our future vision is to make Otsuka a bigger player in the pharmaceutical market," said Joan Butler, vice president of project management. "We believe we'll enhance both our development and commercialization activities."

Otsuka's US products currently include peripheral artery disease drug Pletal (cilostazol) and schizophrenia and bipolar drug Abilify (aripiprazole), which is co-marketed with Bristol-Myers Squibb and had sales of $362 million in the fourth-quarter of last year, a 62 percent increase.