Asajes Offers Up Innovative Partnering Model For Asia Development
Executive Summary
Asajes Ventures sees itself as offering a unique new mixed business model of venture capital and local development activity for smaller Western companies looking to develop their product or pipeline assets in Japan and China, aided by new opportunities from a rapidly reforming regulatory environment.
New Tokyo-based company Asajes Ventures is aiming to create a new financial risk-sharing product development model for companies, mostly from the West, looking to bring their late pipeline or commercialized molecules to Asia, specifically Japan and China.
“We want to facilitate those companies who have first-in-class or best-in-class therapies to accelerate access to these two key Asian markets in a more efficient way,” founder and managing partner Dr Chika Yoshinaga told Scrip in an exclusive interview in Tokyo.
“Our main focus is in late-stage or commercial assets from small or mid-size US or EU pharma and biotech companies that have the potential to reach registration in Asia or a significant regulatory or clinical milestone within five years after investment.”
Rather than offering the standard fee-for-service, subcontractor scheme of traditional contract research organizations (CROs), where the originator company would out-license assets in Japan and China or retain a traditional CRO, Asajes says its partnering model is differentiated through a tailor-made investment scheme.
“We would act like a two-in-one venture capital partner, providing investment to lower the financial risk and also the management of local development programs, through to the development and commercialization stage in the Japan and China markets,” Yoshinaga explained.
Investment Vehicle Approach
Under this approach, it would set up a dedicated special purpose investment vehicle per product/asset with the asset owner. This could involve a straight licensing deal or (preferred) joint venture agreement, into which both parties would invest and to which the asset’s rights in Japan and/or China would be licensed or assigned.
“As well as investing in the vehicle as a sole or lead syndicate investor, Asajes would then manage all regulatory, clinical and business development operations, and control costs and timelines. For example, we could add local arms to global or regional clinical trial programs in a cost-efficient way if appropriate,” Yoshinaga explained.
“This would take advantage of the hugely changing regulatory environment in Japan and particularly China, where recent reforms mean that authorities are accepting more global data to support approvals.”
The other key benefit to partners, Yoshinaga said, would be that the potential time lag for Asian development could be avoided and development sped up, leading to more simultaneous approvals in the region even for smaller companies without the normal resources to achieve this.
“Under the traditional fee-for-service CRO model, quite often it is a case of ‘the longer the better’,” she noted.
“The main thing is that we offer a differentiated means to partnered asset owners, not just the development activity but also the capital investment,” Yoshinaga said. “This model allows us to share financial risk with the partner and benefit from the upside, while for the asset owner it means that they are not diverting cash and management effort away from their strategic priorities which are usually in their home markets.”
Shared Upside
Asajes Ventures co-founder and managing partner Dr Hervé Brailly reiterated this, telling Scrip by phone in the interview that the key point is that “we share the risk with the asset owner, conducting original trials in Japan and China, or as part of a global trial. We add something that European specialty pharma companies may not have in terms of an Asia strategy in place.
“There is significant upside that can be shared, while efficient, high quality clinical data can be generated in Japan and increasingly China. The program management is the key value that we will provide, not the service value.”
The exit strategy for Asajes and its investment in the vehicle would be an out-licensed deal to a third party once it had been taken forward, with Asajes helping to initiate partnering activities with the help of clinical data or an approval.
Alternatively, the asset owner exercises a buy-back option and makes up their own market force in Asia, allowing it to retain global rights.
Yoshinaga noted that Asajes will not provide all functions in-house and that the less strategic of these, such as CRO clinical monitoring functions, would be outsourced to trusted partners, while still allowing Asajes full control of regulatory and clinical strategy.
Experienced, Bicultural Team
The other main advantage Asajes sees itself as bringing to the table is the industry experience and networks that its team has. Yoshinaga, who was born and trained as a physician in Shanghai and has a Chinese background, has worked previously at Sofinnova Partners and with Quintiles Transnational Holdings Inc. (now IQVIA) as head of corporate development in Japan and China.
She founded Asajes Medical, a business and regulatory consulting firm, in 2014 and closed two licensing deals within two years, in Japan and China.
Brailly is chairman of the supervisory board and former CEO and co-founder of French oncology specialist firm Innate Pharma SA, with previous experience at Immunotech SA and its acquirer Beckman Coulter Inc., where he had responsibilities for business activities in China.
Asajes Ventures’ other team members include Dr Kiyohiro Nishikawa, who has decades of experience at Nippon Kayaku Co. Ltd., and Hidemi Aida, who is ex-AstraZeneca KK in Japan and Quintiles Japan. Additional expertise in the China market comes from venture partner Dr. Weixing Yang, a former chief representative in the country at Japanese firm Meiji Seika Pharma Co. Ltd..
Current major investors in privately held Asajes Ventures include the major Japanese canned coffee and drinks group DyDo, which is looking to build a specialty pharma business in Japan. (Also see "From Drinks To Drugs: DyDo Charts Course For Pharma Entry" - Scrip, 10 May, 2018.)
Finding The Right Asset
As to how Asajes will go about finding assets to partner, Brailly explained that there would be several sources: “We will use our corporate connections and also tap prominent VC [venture capital] firms to identify possible partner companies, to find late Phase II/III assets in Europe and the US.”
In general, there is seen to be less capital in Europe than the US, meaning that smaller European firms, as well as specialty companies in the US, should be looking for partners in Asia.
There will be no particular therapeutic focus for asset deals, but the main targets will be smaller specialty pharma companies and their later stage assets to reduce risk. “Ideally we would need proof-of-concept and clear efficacy, and would look at oncology and orphan drugs,” Brailly said.
Asajes would also consider the dimension of clinical trials that would be required. Yoshinaga noted that the venture would not be able to handle very large trials as the costs for these can be very high and it would not have the broad capability need to manage such programs. “We are not competing with big pharma,” she noted.
Some smaller firms remain cautious about Asia and can’t always understand what’s happening in the region. “The hurdles for such companies can be large and they often have little experience with international trials and may want intelligence that could help their independent entry in the future,” Yoshinaga commented.
Expansion, Licensing
In Japan, meanwhile, Nishikawa noted that mid-sized companies there can still be conservative to license in as they have limited funding for such deals, so have to select these very carefully. They may also be looking to expand into other Asia markets but have little experience or knowledge of these.
“Smaller Japanese pharma companies are looking to expand and move into China but may limited capital and market intelligence outside Japan. We could, for instance, help them to add sites in China into a Japanese trial, as well as offering support of business development” to aid an eventual market entry in China.
Traffic in the other direction is limited at present, and Yoshinaga noted that while some Chinese companies are eyeing the Japanese market, there is a lingering image of negotiations taking place at a relatively slow pace, with communication sometimes difficult.
“There are good research seeds in Europe and the US but these can be out of the reach of Japanese firms, for which the development of innovative drugs is becoming increasingly important,” Nishikawa said.
From the editors of PharmAsia News.