Eisai's New Venture Fund Looks To ‘Excavate’ Innovation
Executive Summary
Japanese pharma firm’s new venture capital fund aims to support and gain access to external innovation both at home and in the US, while a new alliance with a Japanese tech services firm will pursue opportunities in digital health and dementia.
Major Japanese pharma firm Eisai Co. Ltd. has set up a new corporate venture capital fund that intends to invest up to JPY3bn ($27.3m) annually over the next five years, the over-arching aim being to facilitate access to novel technology and accelerate innovation.
The company said it is taking the initiative to help “excavate” new areas of research, in the process supporting bioventures and other parties developing these, with an eye to potential future partnerships.
Eisai is not disclosing any specific areas of technology focus at this stage, but in a pointer to possible areas of interest for the new fund, its current mid-term business plan calls for a honing of strategic therapeutic focus on oncology, dementia and related diseases and neurodegenerative disorders.
More specifically, this includes proteinopathy, immune-genetics, and neuro-inflammation, transmission and regeneration in the neurology area, and tumor micro-environment, driver gene mutation and immunosuppressive myeloid linkage in oncology.
While the JPY15bn total potential investment is modest, the hope is that the provision of funding will create synergies with Eisai’s ongoing core in-house research activities in the neurology and oncology areas, and also help to develop innovative digital technologies.
The fund will initially concentrate on investments in the Tokyo area, in what Eisai hopes will be a catalyst for the development of health research-related platforms across Japan. But the company said it also plans to set up satellite offices for the new fund in the US biotech hubs of Cambridge, Massachusetts and San Francisco, California, to gain access to potential technologies and assets there.
Japan Venture Challenges
The formation of VC funds by Japanese pharma firms is not unusual, but most of those set up in the past have had a strong focus on accessing technology, expertise and projects in the US. Several, such as the funds by Takeda Pharmaceutical Co. Ltd. and Astellas Pharma Inc., are long-established; Takeda Ventures Inc. for instance, based in Palo Alto, was founded back in 2001 as Takeda Research Investment.
Within Japan, multiple bioventure executives in the country have told Scrip that private equity and other financial and corporate investors in the country remain typically risk-averse when it comes to the pharma sector. In many cases, they are looking for relatively quick exits through M&A deals or early IPOs, an approach that can sometimes be at odds with the bioventure’s own business strategy.
As such, Eisai’s new initiative may provide a welcome new source of potential funding, enabling the company in the process to gain access to new alliance and licensing prospects.
More broadly in terms of translational research, most major universities in Japan have technology licensing offices to act as an interface with potential licensees, which has provided the base technology for a number of bioventures, while the main industry associations also have programs to help link partners.
General Mid-Term R&D Strategy
Eisai’s current "EWAY2025" mid-term business plan (which started in April 2016) calls for various approaches to the creation of next-generation drugs for real remaining medical needs.
Under this, oncology and neurology together are seen accounting together for 60% of a projected JPY800bn+ ($7.29bn+) in group revenues in fiscal 2020.
A major component is the integration of ICT (information and communications technology) approaches, including making more active use of internal and external big data and genomic data, and pursuing collaborations with other pharmaceutical companies and ventures, governments, academia, medical organizations and care facilities, along with diagnostics, IT and insurance companies.
In dementia, the aim is to create a whole care ecosystem ranging from disease awareness and early diagnosis through to community networking to support patients and their families, and this may provide other potential areas of “beyond the pill” interest for the new VC fund.
Eisai has also not shied away in the past from making targeted acquisitions to build specific therapeutic areas and access technology, paying $325m in 2007 for US antibody venture Morphotek Inc., and $3.9bn the following year for US oncology specialist MGI Pharma Inc.
Allm Digital Health Partnership
Separately, and as part of the pursuit of ICT digital health solutions, Eisai has also entered into a capital and business alliance agreement with the Japanese venture Allm. The two companies will collaborate on information provision to patients and healthcare professionals, and develop digital health solutions related to regional medical treatment cooperation and comprehensive community care through Allm’s ICT platforms.
By applying Allm’s experience in medical ICT to the dementia ecosystem that Eisai aims to establish, the two companies will promote the utilization of health-related IoT (internet of things), big data and AI (artificial intelligence) technologies in the health care area.
Eisai said it is aiming to more widely analyse big data, including real world data, for the development of diagnostic methods, and in the area of dementia aims to more actively utilize external big data and genomic data.
Tokyo-based Allm (formerly SkillUpJapan) provides services related to social welfare design, specializing in medicine and healthcare, and develops programs for medical devices and provides. It has developed several apps including Team, a comprehensive community care application, and MySOS personal health record app. Its Join communication app is designed to ease communication among healthcare professionals, and became Japan’s first medical device program eligible for national health insurance.
Internationally, Allm provides approximately 1,700 medical/nursing institutions across 12 countries with ICT systems related to medicine and nursing.
Eisai already has an established digital health project related to dementia, where it has long had a presence through former Alzheimer’s disease blockbuster Aricept (donepezil). In Japan, it has been running since 2016 Hikari One Team SP, a cloud-based, subscription digital health initiative to link Alzheimer’s patients and their carers, by sharing information on well-being and therapy plans. (Also see "Eisai Steps Well ‘Beyond The Pill’ In New Japan Care Service" - Scrip, 13 Jul, 2016.)