JAPAN TO CLOSE BIOTECH DEVELOPMENT GAP WITH US AND EUROPE

According to industry studies, Japan's biotechnology sector continues to lag behind US and European markets. Nevertheless, recent reports indicate that the sector has undergone a marked development in recent years, with its aggregate value increasing from some JPY200bn (US$1.91bn) to JPY1.6trn (US$15.29bn) between 1989 and 2000. Consumer pharmaceuticals account for approximately one-third of the biotechnology market.

Industry sources have widely attributed the country's relative slowness to embrace the new technology to a lack of understanding of biotechnology's potential and an entrenched academic bias toward more historic areas of expertise such as electronics. Sector sources also cite a lack of suitable locally based venture capital firms to bring possible breakthrough therapies to market. Although some 400 new biotechnology companies have been established since 2000, educational institutions continue to account for an overwhelming majority of new drug patent applications.

Despite these financial and cultural hurdles, Japan's government appears committed to further action on the issue. It is hoped that recently-introduced regulations to ease the transfer of intellectual property from universities to commercial interests, as well as last year's announcement of a new JPY500bn (US$4.78bn) government funding stream for biotech research, will stimulate opportunities in the sector. Authorities appear eager to embrace the industry, as Japan's traditional drugmakers face shrinking product portfolios and foreign venture capital firms continue to enhance their local presence.