NEW YORK -- The Japanese medical market for biotechnologyproducts will quadruple by the end of the century, a U.S.representative of Green Cross (Japan) told an industry audiencehere recently.

Furthermore, many of the deals involving biotechnologycompanies will continue to be made by Japanese breweries andother companies traditionally outside the pharmaceuticalindustry, Steven Schack, a Green Cross marketing manager, saidat the annual meeting of the New York BiotechnologyAssociation.

Schack said projections for the Japanese medical market forproducts derived through biotechnology indicate an increase to$13.9 billion by the year 2,000, up from last year's $3 billion.To date, deals with U.S. biotechnology companies involvepredominantly therapeutics (68 percent) and diagnostics (25percent), with the balance divided between vaccines and drug-delivery systems, according to the company's analysis.

Companies outside the pharmaceutical industry, includingbreweries such as Kirin and Suntory Ltd., are becoming moreinvolved in U.S. and European biotechnology companies at anearly stage.

Kirin, for example, has been involved in biotechnology since its1984 deal with Amgen Inc. for erythropoietin, and Suntorysigned a $15 million collaboration with Xenova Ltd. of theUnited Kingdom in April.

The interest of such non-traditional corporations has alreadyforced tactical changes among established pharmaceuticalcompanies. "Japanese pharmaceuticals have always preferredto see clinical data before making deals, but non-pharmaceuticals are making earlier-stage deals for basic R&D,"Schack said.

As of February, U.S.-Japanese biotechnology deals involvedresearch-stage products 40 percent of the time and later-stageproducts 60 percent of the time, according to Green Cross'analysis. In contrast, European partners made research-stagedeals 54 percent of the time and later-stage 46 percent.

Competition from non-traditional companies such as brewerieswill mean that fewer good, late-stage deals will be available,Schack said. Schack also projected more independentdevelopment and marketing of U.S. and Europeanpharmaceutical products in Japan, reflecting growingfamiliarity with the Japanese business environment.

"All of these factors will drive Japanese firms to target U.S.biotech for access to cutting-edge products and technologies,"he said.

-- Warren Strugatch Special to BioWorld

(c) 1997 American Health Consultants. All rights reserved.