Genetics Institute OKs Landmark Venture in Japan : Pharmaceuticals: It’s apparently the first time that a U.S. biotechnology company has been able to sell products directly in Japan rather than through a licensing agreement.
Genetics Institute Inc. said Monday that it has agreed to a joint venture with a Japanese pharmaceuticals company to develop and market in Japan new genetically engineered proteins designed to promote bone growth.
The venture with Tokyo-based Yamanouchi Pharmaceutical Co. is apparently the first time that a U.S.-based biotechnology concern will have an opportunity to market products directly in Japan rather than selling through a licensing agreement. The companies will share equally in profits from the sale of products in Japan, Genetics Institute said. The companies also will form a partnership to develop and market the products worldwide.
Genetics Institute is considered one of the nation’s leading biotechnology concerns.
The agreement is important in that it provides financial resources for Cambridge, Mass.-based Genetics Institute to further develop drugs that are not yet commercial products, said David S. Webber, a New York-based analyst with Alex. Brown & Sons of Baltimore.
Webber estimated that Yamanouchi will contribute $30 million to $35 million to the venture. “That’s help in funding the development that was not there before,” he said.
Researchers hope the products that emerge will be able to treat serious fractures or repair damage from diseases that cause bone deterioration, including osteoporosis and certain dental ailments. They may also be useful in cosmetic surgery.
Osteoporosis, a disease primarily affecting older women that is characterized by a reduction in bone density and brittleness, may ultimately be “the greatest market,” Webber said.
Genetics Institute cited analysts’ estimates that the worldwide market for such products could exceed $2 billion a year.
Other biotechnology companies, including Palo Alto-based Collagen Corp., are researching proteins to help the body’s natural bone-repair mechanisms, but the Genetics Institute proteins, called BMPs, are designed to actually promote new bone growth.
Garen Bohlin, Genetics Institute executive vice president, said its BMPs--or bone morphogenetic proteins--are in preclinical testing. The first is not expected to go into the human trial stage until 1991. The company was granted a patent last year for BMP-1 and has filed patent applications on other BMP proteins.
Investors welcomed the news about Genetics Institute, which last week suffered a setback. Wellcome PLC withdrew from a deal with Genetics Institute to develop TPA--a blood-clot-dissolving drug--because of a continuing patent fight with Genentech of South San Francisco. Genetics Institute also continues to be embroiled in a patent fight with Amgen of Thousand Oaks over U. S. marketing rights to erythropoietin, or EPO, a drug that helps fight off anemia in patients with problems such as kidney disease.
In over-the-counter trading Monday, Genetics Institute closed at $38, up $1.875.
“This relationship provides a tremendous opportunity for us to accelerate our development of bone-growth-factor products and to participate significantly in profits from potential future sales of such products on a worldwide basis,” Gabriel Schmergel, Genetics Institute’s president and chief executive, said in a prepared statement. The agreement allows the company to keep exclusive worldwide manufacturing rights and exclusive North American marketing rights to BMP products.
“Yamanouchi will benefit from participation in the commercialization of one of the pharmaceuticals industry’s next major growth fields, as well as potential future products coming out of Genetics Institute’s pipeline,” said Shigeo Morioka, Yamanouchi chairman.
Yamanouchi, one of Japan’s largest drug companies, has made other deals with U.S. companies--it purchased Shaklee Corp.’s Japanese unit.
