One Osaka company has become the bell-wether for Japanese biotechnology. AnGes, the first university spin-out to be listed on the Japanese stock exchange, is waiting for the results of a phase III clinical trial on a gene therapy to treat vascular ailments ranging from arteriosclerosis to angina. When they come — sometime next year — they could have a wide-ranging effect on Japan's nascent biotech industry.
"If it fails, investors might feel they shouldn't put money in biotech," says AnGes' co-founder Ryuichi Morishita, a gene-therapy expert at Osaka University. Investors and policy-makers alike hope that successful commercialization of the treatment could galvanize the nation's flagging biotechnology industry.
That the success of Japanese biotech might ride on the fortunes of an Osaka-based company will not surprise many in the country. Osaka gave rise to most of Japan's major pharmaceutical companies. The nation's drug industry has sales of some US$60 billion and the pharmaceutical companies grouped in greater Osaka, centred in an area called Doshomachi, account for 13% of this total, more than any other region in the country. Moreover, Osaka University is arguably the country's strongest in life sciences, accounting for many of Japan's most influential biology papers over the past two decades.
Osaka's bid to become Japan's biomedical centre is buoyed by regional ties with nearby Kyoto University and the city of Kobe, where the country is focusing its efforts in developmental biology and regenerative medicine. Spring-8, the world's largest synchrotron, is only 120 kilometres away and easily accessible for those who want to use the light source's radiation to analyse protein structures.
But Osaka's biotechnology ambitions are not immune from the obstacles faced by the rest of the country. Nationwide, industry and academia have shown little will to work together. Dynamic personalities with scientific, legal and business backgrounds who could bridge the gap between academia and industry remain few and far between — neither the culture nor the education system encourages people to dabble in different fields. Language difficulties and a reclusive culture mean there are few research links with international groups.
Confident approach
Nevertheless, the city is brimming with confidence and energy. In a country that often looks down on the profit motive, Osaka has traditionally been the merchant centre, where wholesalers gather and sell goods with entrepreneurial vigour — a stark contrast to the polished, bureaucratic and slow-moving Tokyo. "We have different DNA," says Morishita. Indeed, in the year following last spring's reorganization of universities into semi-private entities responsible for balancing their own books (see Nature 419, 875–876; 2002), Osaka University chalked up more profit than any of Japan's 89 other former national universities. "We won't hesitate to make money," says molecular biologist Tsuneaki Sakata, a visiting professor at Osaka University. If a profitable biotechnology industry is going to flourish in Japan, Osaka may well be the place to look for the first shoots.
Osaka's biotechnology efforts are concentrated in the northern part of the city, which the central government has designated a 'biocluster'. Between 2001 and 2004 the country invested ¥24 billion (US$210 million) in the development of what its organizers at the Osaka Chamber of Commerce and Industry hope will rival successful US bioclusters, such as Genetown in Boston.
The 743-hectare Saito Life Science Park, opened in the spring of 2004, aims to lure bioventures and international drug companies with tax breaks and other incentives. The park also houses a national research institute for the development of new medicines. Some 20 biotechnology start-ups, including AnGes, are setting up shop there. "Things are really starting to pick up," says Sakata.
Toshio Yanagida is embracing Osaka's collaborative spirit to bring some cell biology into electrical engineering.
The park will build on the existing network of facilities and researchers, which includes the Osaka Bioscience Institute, Osaka University, the university hospital and the National Cardiovascular Center. The university and affiliated research institutes are a breeding-ground for scientific results with great potential. Between them these institutes have scored notable successes in areas such as protein structure and immunology.
Despite Osaka's wheeler-dealer reputation, most academic researchers there — like those throughout the country — continue to view involvement with industry as a distraction from their real work.
"Japan is losing a lot of its potential," says Toshikazu Nakamura, a geneticist at Osaka University. He learnt about patenting after his discovery in the 1980s of a protein called HGF, which stimulates the growth of many tissues, including blood cells. Unusually for a Japanese academic, Nakamura holds some 80 patents.
Academics' attitudes may be changing slowly since last year's reorganization, but so far the anticipated breakthrough in university–pharmaceutical cooperation has not taken place, says Toshio Tanaka, chief corporate adviser at drug company Tanabe Seiyaku in Osaka.
Commercial breaks
The Japanese drug industry remains sceptical about what academic researchers have to offer. The apparent mismatch stems from academic researchers' traditionally uncommercial outlook — even those who patent their discoveries are not necessarily doing the sort of cutting-edge research that companies want to invest in. "You can end up just piling up patents," says Tanaka. The situation is in stark contrast with the United States, where savvy academics know what will sell, he adds: "At US universities, when the professors put out something new, the businesses come running."
Another obstacle to bridging the biotechnology gap is the lack of multi-talented staff who can fill the gaps between academia, industry and law. Osaka hosts a leading biotech intellectual-property firm, Shusaku Yamamoto, named after its founder. On the day of Nature's visit to his office, Yamamoto had hired two biology PhDs — both from abroad. It is very difficult to find qualified scientists in Japan who have additional training in business or law, he says. Indeed, Yamamoto has opened a branch in Tokyo to broaden his search for capable multiskilled staff.
Those trying to make Osaka a biotechnology hub are addressing the problems of commercializing research head-on. The Osaka Chamber of Commerce and Industry has established a 'biobusiness station', a six-month training programme that invites speakers such as Yamamoto to teach scientists about the various fields of expertise, such as technology transfer, that are necessary in biotechnology. Since it was founded in February 2003, 98 graduates have passed through this training course and eight have taken up posts in industry. It is unusually diverse in the strict Japanese educational system, in which it is almost unheard-of for a biologist, say, to switch to law.
Osaka University, too, has been actively pushing industrial collaboration, says its president Hideo Miyahara. The university now has six formal collaborations with industry. The number of joint research projects with industry jumped from 206 to 508 in the year to March 2005.
National policies are supporting these efforts. Regulations precluding university researchers from working as board members for private enterprises have been relaxed. "Five years ago, the door was tightly closed," says Morishita. "Now it's quite a bit easier to work with industry."
Some now argue that the pressure to take up patentable research has gone too far. For example, a lot of researchers take exception to some grants that make applicants — even graduate students — list their patents and assess the applicability of research. "It's complex for researchers like me," says Akira Shinohara, a geneticist at Osaka University's Institute for Protein Research. "In the future, my work might be patentable, but it is difficult to know now."
Fresh perspectives
But many in Osaka are embracing opportunities. Some interesting examples of the collaborative research between industry and academia are at the Graduate School of Frontier Biosciences, which focuses on interdisciplinary research. Toshio Yanagida, an engineer by trade, began monitoring the physical work of single-molecule proteins as they change the structure of the cell. He was impressed with the cell's ability to transfer information at nanoscale levels and high speed without producing destabilizing heat — something that designers working on semiconductors are finding increasingly hard to do.
In collaboration with electronics giant Matsushita, Yanagida is now transferring this knowledge of cell mechanics back to electrical engineering. He suggests that what has been called 'background noise' in a semiconductor system might actually be able to amplify the signal rather than drowning it out as would be expected. "It's time to take another look at noise," says Yanagida.
Such unconventional studies would be difficult elsewhere in Japan, says immunologist Tadamitsu Kishimoto, who established the graduate school during his term as university president, which ended in 2003. "There's more freedom in Osaka than in rigid, bureaucratic Tokyo," he says.
Other interdisciplinary research is already paying off. Sosho, a company at Osaka University's biotechnology incubator, struck it big when a team of electrical engineers and molecular biologists found that they could solve the structure of large membrane proteins by training a laser on them. Although such molecules account for a third of all drug targets, only a small percentage of these structures has so far been solved. The unprecedented efficiency in crystallizing proteins brought in an abundance of customers both in basic research and drug development. Within two months of opening its doors for business this July, Sosho was in the black.
"This could change the world of protein studies, and we don't have to go to the Moon to do it," says laser engineer Yusuke Mori, Sosho's representative director, referring to efforts to crystallize proteins in the space shuttle. He thanks the city's sense of adventure for opening up interdisciplinary studies. "In Osaka, many people want to take the challenge of exploring new fields," he says.
Breaking the barriers
Despite these successes, the Japanese working environment has not proved too appealing to foreigners. Language barriers and a bureaucratic system create obstacles to overseas companies and researchers.
Japanese companies likewise have done little to push beyond their borders. Drug companies depend on a large, and rather protected, domestic market rather than innovation, says Yamamoto. "If the focus is only on Japan, it's impossible to grow," he says.
The Institute for Protein Research has made international collaboration a priority by creating a full-time post for a foreign researcher. It also runs the Protein Data Bank of Japan, which shares structural information with the Worldwide Protein Data Bank. In August, the university's Research Institute for Microbial Diseases opened a centre in Thailand for collaborative research in infectious disease — a very rare move for a Japanese university.
Still, it is not clear how Osaka can clear the hurdles that have prevented it from becoming a magnet to business and investment like its regional rival Singapore, where multinational companies and internationally renowned researchers have set up shop.
Problems with the nationalized medicine policy make it difficult for companies, both domestic and foreign, to innovate, says Tanaka. He says that the health ministry forces the prices of drugs down even during the life of a patent, so that a new drug initially fetching ¥100 will raise only ¥20 by the end of its patent. "If there really are revolutionary ideas, we are very willing to invest. But when the prices keep falling, it's not worth it," Tanaka says.
Inadequate infrastructure for clinical trials, such as the absence of a payment for participants, makes it hard to gather patients, says Morishita. "In the United States you can do it for half the cost in a quarter of the time," he says. Distance from Tokyo makes wrangling over regulatory procedures even more difficult.
Nevertheless, an increasing number of companies are giving it a go. AnGes has just begun phase I trials on its second product, an oligonucleotide that intercepts immune-response signals in inflammatory diseases such as arthritis. But AnGes will have an earlier test in the shape of its first drug trial — and that could set the tone not only for the company's future but also for that of Osaka's biotech ambitions.