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Competitive Positioning Strategies for Japanese Biotech Companies
Frost & Sullivan, Nov 2003
Recent Initiatives from the Government Catalyze Market Growth
Significant government support is ensuring that Japan is fast emerging as a force to reckon with in the global biotechnology industry. Realizing its huge potential, the Japanese Government is pumping in funds, introducing administrative changes, and streamlining regulatory structures. These initiatives are helping shape biotechnology into a pillar industry of the Japanese economy and creating lucrative opportunities for companies planning to enter the market. For instance, having recognized the importance of industry-academia interaction, the government has modified regulations to create a viable environment in which such interactions can occur. Another key step taken by the government is the setting up of the Biotechnology Strategy Council, which is slated to play a defining role in boosting competition, strengthening R&D, and expediting technological advancement.
This research identifies and discusses drivers, restraints, and the latest trends and developments in the Japanese biotech market. Detailed analyses provide a clear understanding of Japans standing in this market in relation to other countries, while competitive positioning strategies help companies take advantage of available opportunities.
Strong Domestic Market - A Major Attraction for Biotech Companies
Biotech has thrown open the doors of the lucrative pharma industry, which has been hitherto impenetrable, to a host of small players. These companies will now have access to the second largest pharmaceutical market in the world, says the analyst. Japans substantial domestic market for prescription products will benefit local companies that lack the financial resources to take their products out of the country. With high per capita spending on medicines, selling in the domestic market - even with low levels of investment - can be a profitable venture for these companies.
For foreign companies, the sheer size of the Japanese market is a considerable attraction. This gives Japan a distinct advantage over other countries in the region such as Australia, South Korea, and Singapore, whose biotech industries are limited by their smaller domestic markets.
Biopharmaceuticals Continue to Rule the Roost
Biopharmaceuticals continue to be the mainstay of the Japanese biotech market, accounting for 40 percent of the total market. Recombinant protein drugs such as erythropoietin and interferon have the highest market share in the biopharmaceuticals segment. Erythropoietin, the largest selling product with a market size of around $1.00 billion, is expected to show continued healthy growth.
Although most of these biopharmaceuticals are produced in technical collaboration with European and American companies, Japanese biotech companies are now investing heavily in research to bring out their own products and are eyeing various emerging areas. Regenerative medicine, which promises to grow organs and tissues to eliminate the problem of rejection that occurs with organ transplants, holds much interest for Japanese companies. The other potential areas of growth are expected to be protein drugs and glycobiology, says the analyst.
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