JT''s 1987 Foray into Pharmaceuticals Business is Helping to Diversify Its Portfolio Today

Source from:  Tobacco Reporter  07/16/2013

Since its establishment in April 1985, Japan Tobacco has consistently churned out top-notch tobacco products in a tireless effort to earn its current status as the world's third-largest tobacco company. With products that have withstood the test of time and remained popular choices among gen-erations of tobacco users in more than 100 countries, JT has become synonymous with success in a market that is famous for the constant fluctuations in the preferences of consumers. Less well-known—and perhaps surprising to some—is that JT also operates a pharmaceutical arm. The pharmaceutical divi-sion is likely to attract more attention in the future, however, as it steps up innovation, making a name for the company in its own right.　

With an end goal of developing original and innovative drugs that have the power to significantly improve and poten-tially save the lives of millions of people suffering from a wide array of ailments, JT set in motion a plan to create a world-class pharmaceutical business in 1987. Centering its attention on the research and development of cutting-edge drugs that would garner the appreciation of patients and the respect of medical communities around the world, JT's pharmaceutical staff focuses mainly on the fields of glucose and lipid metabo-lism, virus research, immune disorders and inflammation.

To enhance its ability to carry out the research and devel-opment of groundbreaking drugs in-house, JT constructed a full-scale facility dedicated to the pharmaceutical side of its business in 1993. Located in Takatsuki City, Osaka Prefecture, the Central Pharmaceutical Research Institute serves as the beating heart of JT's research and development endeavors, from the discovery and development of new drugs to the performance of pre-clinical trials. Clinical trials and the complex drug application process are handled by JT's pharmaceutical development division and Akros Pharma, a subsidiary based in Princeton, New Jersey, USA.

Valuable contributions

Since 1998, JT has held a majority stake in Torii Pharmaceutical Co., which is responsible for manufacturing medications and driving the domestic sales and marketing aspects of the com-pany's drug-development process. Compounds developed and commercialized for use in other nations have been out-licensed by JT through partnerships formed with pharma-ceutical and biotech companies such as Gilead Sciences and GlaxoSmithKline, with JT receiving royalties that are linked to the sales performance of its partners

Once JT's research and development process is complete, and a compound has passed the appropriate clinical trial phases and been deemed effective for combating a specific disease, a New Drug Application must be filed and approved before the medication can be introduced to the market place and made available to patients.

Since the pharmaceutical arm of the company was created more than a quarter century ago, JT has been instrumental in the development of drugs used to treat a variety of diseases, including HIV infection, hyperphosphatemia and melanoma. In July 2003, JT acquired exclusive rights to commercialize three anti-HIV drugs —Emtriva, Viread and Truvada—in Japan through an in-licensing agreement with Gilead. By September 2007, JT and Torii had concluded a licensing agreement with Keryx Biopharmaceuticals in New York City regarding a compound designed to treat hyperphosphatemia in patients with chronic kidney disease, and in March 2009, Torii launched the Remitch cap-sule, an oral anti-pruritus drug that is prescribed for hemodialysis patients.

JT has played an integral role in the development of an assortment of drugs since it first moved onto the pharmaceu-tical scene; however, some of the com-pany's most notable achievements have been accomplished over the course of the past four months alone.

On March 25, the Japanese Ministry of Health, Labor and Welfare approved a novel anti-HIV drug marketed as Stribild Combination Tablets for use in Japan, with its launch beginning in May. Composed of four compounds—elvitegravir 150 mg, cobicistat 150 mg, emtricitabine 200 mg and tenofovir disoproxil fumarate 300 mg—Stribild is the first single-tablet, once-daily HIV medication to be commercialized in Japan. Prized by physicians and their patients alike, the drug answers an unmet need in the HIV-care community because it provides a simple and convenient way for those suffering from HIV-1 infection to adhere to their prescribed treatment plans. JT's origi-nal compound, elvitegravir, acts as an integrase inhibitor, blocking the HIV virus from integrating into healthy human cells and inhibiting its ability to replicate.

"Stribild provides a complete course of HIV treatment by combining four compounds in a single tablet, and it is the first simplified therapy of its kind to contain an integrase inhibi-tor," a spokesperson for Gilead said in a statement to  Tobacco Reporter. "In order for HIV treatments to be successful in real-world settings, patients must take them on a consistent, daily basis. A　significant benefit of single-tablet regimens like Stribild is that they streamline a multidrug HIV regimen into one simple dose, making it easier for patients to adhere to their medications. This is critically important, as adherence has been shown to reduce hospitalizations, incidence of co-morbidities and drug resistance, and to improve survival and life expectancy."

JT licensed elvitegravir to Gilead, an American biophar-maceutical company based in Foster City, California, in 2005 with the rights to develop and commercialize the drug worldwide, excluding Japan. Gilead received approval of Stribild from the U.S. Food and Drug Administration (FDA) in August 2012, making it the first of JT's pharmaceutical products to be cleared for use by patients in the United States. On May 28, Gilead also announced that Stribild has been approved by the European Commission and will be marketed to patients in all 27 countries of the EU

In addition to Stribild, another of JT's original drugs recently passed the complex approval process in the United States. On May 30, the company announced that its partner GlaxoSmithKline received approval of trametinib—a com-pound that serves as an MEK inhibitor in patients who have been diagnosed with unresectable or metastatic melanoma with BRAF V600E or V600K mutations—from the FDA. The world's first MEK inhibitor, trametinib was licensed exclu-sively to GlaxoSmithKline in April 2006 and will be marketed as Mekinist in the United States.

Mid- to long-term target

While the combination of pharmaceuticals and tobacco might strike some as unusual, JT views the businesses as comple-mentary rather than contradictory. "When Japan Tobacco Inc. was established in 1985, one of the biggest business challenges was to strengthen [its] business foundation by diversifying its business," says Ryohei Sugata, general manager of JT's Media and Investor Relations Division. "Now, JT's business portfolio consists of the international tobacco business, the Japanese domestic tobacco business, the pharmaceutical business, the beverage business and the processed food business. Under the Business Plan 2013, the pharmaceutical business's mid- to long-term target and role is to strive to establish [a] stronger profit platform through rapid and efficient market launch of compounds in late phases of clinical trials and value maximiza-tion of each product."

According to its consolidated financial results report for the 12 months ended March 31, 2013, adjusted EBITDA in JT's pharmaceutical branch was –¥12.7 billion, primarily due to an increase in R&D expenditure, reflecting progress in product development, while revenue was ¥53.2 billion ($561.7 million), an increase of ¥5.8 billion from the 12 months ended March 31, 2012.

Needless to say, JT is counting on those results to further improve as its R&D investments start paying off. Enditem