Japan Is Racing to Catch Up, Pass the U.S. in Field of Biotechnology

Behind for years in sophisticated biotechnology, Japan now is making a serious challenge for industry leadership. Scientists on both sides of the Pacific say the United States, the current world leader, is in danger of being overtaken.

A report by the Japan Economic Research Center last year said Japan could surpass the United States in biotechnology in the 21st Century, largely through joint ventures and technical tie-ups.

A 1984 study commissioned by the U.S. Congress said Japan is becoming America’s “most serious competitor” in the field, and that the Japanese government “has made the commercialization of biotechnology a national priority.”

Biotechnology is a term used to describe the new techniques developed in the 1970s for manipulating genes, proteins and other biological substances. These techniques allow the large-scale manufacture of products that could once be obtained only by extracting them from natural sources.

Existed for Centuries

From speeding up beer-making to producing the virus-fighting substance interferon from silkworms, biotech in Japan has revolutionized many industries in recent years. Yet fermentation techniques, a vital process in biotechnology, have existed in Japan for centuries.

According to the Ministry of International Trade and Industry, Japan in 1983 had 2,600 breweries, 1,887 miso bean paste companies and 2,927 soy sauce manufacturers--more than 7,400 fermentation enterprises.

Because of the importance of fermentation in biotechnology, these companies are excellent springboards to diversify into more sophisticated biotech areas, as did Yamasa Soy Sauce, founded in 1645.

Yamasa has been able to produce beta-interferon by using antibodies, proteins that adhere only to certain substances, that are specific for beta-interferon, causing the interferon to precipitate out of solution.

“We were the first in the world to manufacture and market these antibodies,” says Akira Kuninaka, director of Yamasa’s research laboratories.

No one disputes that Japan still trails the United States. The Bioindustry Promotion Committee, a MITI advisory group, said in September that Japan is behind in developing new biotechnology.

Plans Stiff Challenge

But some scientists say Japan has nearly caught up with Western competitors in techniques using bacteria to produce simple proteins, and is ready to mount a stiff challenge in the next five years producing more complex proteins using mammalian cells.

In 1983, the Japanese brewery Suntory Ltd. licensed technology to Schering-Plough of the United States on producing gamma-interferon from a synthetic gene in “the first export of biotechnology from Japan,” says Mitsuru Miyata of Nikkei Biotech, an industry biweekly.

Last year a food company, Ajinomoto Co., licensed production methods of Interleukin-II, a drug that enhances immune response, to Hoffman-Laroche of the United States.

In January, Asahi Chemicals announced that it had succeeded in cloning and purifying human tumor necrosis factor, an anti-cancer drug. The revelation startled scientists at the U.S. biotech giant Genentech, which had published its own ability to do this only a month earlier, Miyata said in an interview.

Asahi has revealed that it will begin clinical trials shortly of tumor necrosis factor, while Genentech will not do so until next year, according to Miyata.

“In the end, Japanese companies may come out the winners in biotechnology using microbes as hosts,” Miyata said.

Piggyback Research

Some non-Japanese scientists, however, feel that Japan is using joint ventures to piggyback on American research.

Not so, says MITI.

“Venture enterprises in the United States have the technology to develop new products, but not necessarily good production facilities or marketing ability,” says Shigetaka Seki of MITI’s Bioindustry Office. “So they link up with large chemical companies, both in the United States and in Japan.”

At least four Japanese firms are working with British and American firms on interferon research. Eighteen Japanese firms are in the field.

Along with tumor necrosis factor, produced simultaneously with gamma-interferon but believed more effective in fighting cancer, the Japanese also are aggressively studying tissue plasminogen activator, which dissolves blood clots and which scientists say could develop into a $400-million market, and monoclonal antibodies, useful for detecting cancer in humans.

The competition goes beyond the private sector. Last year a Bulgarian diplomat hurriedly left Japan after he was found to have sought top-secret biotech data from a Japanese company.

The MITI’s budget for biotech in fiscal 1985 is 4.23 billion yen ($17 million), up 18% from 1984 and 40% more than fiscal 1983.

Acts as Clearing House

MITI’s Bioindustry Office is more active, however, as a clearing house for government funding of projects. It set up the Venture Enterprise Center which studies proposals and recommends them to financial institutions for loans.

“These activities between private companies are part of the market mechanism and should not have the interference of the government,” Seki says. “But we support private incentives and encourage private sector activities.”

Other official research budgets in the current fiscal year total 45.2 billion yen ($181 million), mostly for the Ministry of Education.

But corporate spending is much higher--an estimated $380 million-plus this year, Seki says.

According to separate 1984 reports by the Bioindustry Promotion Committee and MITI, the global market could reach $60 billion by the year 2000, and would likely be led by pharmaceuticals, food additives, paper-pulp products and synthetic rubber.

Other applications include textiles, dairy products and even cosmetics. Kanebo Ltd. has just begun marketing its Bio-Make lipstick and eye shadow, using posters of a model they call Bio-Cinderella.