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Regenerative medicine is just beginning to be understood by governments and investors alike. Last autumn, new regulations took effect in Japan that promise to speed patient access to some of these new therapies. In this interview with The Life Sciences Report, Colin Lee Novick, managing partner with CJ Partners, describes Japan's regenerative medicine frontier and lists investment-worthy companies that are pushing the boundaries.
The Life Sciences Report: Japan's Pharmaceuticals and Medical Devices Agency (PMDA) has provided an expedited path to approval for regenerative therapies. How does that help propel Japanese regenerative medicine companies into the life sciences mainstream?
Colin Lee Novick: In terms of getting seed monies and technologies, the West has a much more vibrant venture capital environment, whereas Japan is heavily focused on university research. A lot of Japanese startups do preclinical and early clinical development studies at universities. Japan's equivalents to clinicaltrials.gov, for instance, show that research institutes and national universities perform almost all regenerative medicine clinical trials.
But there seems to be a belief in Japan that regenerative medicine may become the fourth pillar of medicine, joining small molecules, biotherapeutics and medical devices. Now that Japan has the framework in place, making regenerative medicine a success requires will, capital and some success stories.
I think the will is there. You can see it among the researchers. They're very excited, and a lot of Japanese—including Japanese companies, researchers, politicians and regulators—believe in it. The traditionally very cautious PMDA, and the Ministry of Economy, Trade and Industry (METI) are also on board.
Now the growth of the industry depends on obtaining funding, and seeing which companies will bring the more successful seeds of innovation to fruition. Currently, that means Japanese large pharma. Banks, traditionally, have been the Japanese funding vehicles of choice, but the banks are not in a position to make a big move. Therefore, Japanese companies must find ways to interest other investment options.
TLSR: Do you see venture capital playing a larger role in Japan?
CN: To be frank, I think foreign venture capital will catch on faster than Japanese venture capital. The first few infusions of capital into Japanese regenerative medicine probably will be from foreign capital entities. In that respect, Japan will be a follower. But in terms of establishing a regulatory framework, the country definitely has taken the lead.
TLSR: My understanding is that the new regenerative medicine regulations give conditional marketing approval for regenerative therapies before all the clinical trials are completed. How does that affect life sciences companies in Japan and globally?
CN: First, the PMDA has mentioned there is a slight misunderstanding as to the time-limited and conditional approvals mentioned in the legislation. There is not a separate pathway for regenerative therapies. The application form for any type of clinical trial in Japan is exactly the same.
But if the clinical trial is for regenerative medicine or cellular therapy, and if the therapy appears safe and efficacious after Phase 1 or Phase 2, the PMDA may, at its own discretion, grant conditional approval. Companies should not say they are aiming for conditional approval or try to influence the PMDA to grant it. That won't put a company in a positive light. Instead, companies might mention that they are hoping, should clinical trials present with the right type of data, that the PMDA may consider the therapies for conditional approval. It's a small difference, but when translated into Japanese, it is much more distinct.
“There seems to be a belief in Japan that regenerative medicine may become the fourth pillar of medicine.”
How does the legislation affect both Japanese companies and Western companies? I'll begin with the Japanese. The smaller Japanese biotechs and venture companies don't realize how much the new laws have put Japan in the spotlight. As they understand this, I believe they will begin producing much more information in English, because they're not getting the attention of Japanese big pharma or the banks. These companies will begin looking for partners outside Japan. They offer new sources of innovation to Western companies and, when compared to similar companies in the West, they are not nearly as costly.
Many of these companies have amazing technology and some very advanced research, but it's all in Japanese, so it is relatively undiscovered.
The behemoths of the Japanese life sciences industry are the opposite. They aren't particularly interested in teaming up with smaller Japanese companies and positioning them as the centerpieces of their regenerative medicine strategies. This is because these smaller domestic firms do not generate the global media attention the larger companies want.
