Chapter 7 An Ambitious Leap Forward | ｰｮｶｹｴｫﾃｽ.

Eisai India employee (right) conducting a preventative screening test for dementia as part of hhc activities aimed at better understanding and empathizing with patients

Upon breaking into the world's top 20 pharmaceutical companies at the start of the 21st century, Eisai's global business made another dramatic leap forward propelled by stellar contributions from sales of Aricept and Pariet (AcipHex in the United States), with its overseas sales ratio in 2002 exceeding 50% for the first time.

Eisai also expanded considerably in Europe during this period with new marketing subsidiaries, advancing one-by-one into four major European countries窶杯he United Kingdom, Germany, France and Spain窶蚤nd later into countries such as Italy, Sweden, Austria and Switzerland to form a major distribution network consisting of ten companies across the continent. In addition to Aricept and Pariet, the company also bolstered its business infrastructure with a franchise expansion into epilepsy-related products.

Meanwhile, the company also began to expand into high-growth emerging economies. Eisai made its entry into the mainland Chinese market in 1991, beginning with the establishment of a Chinese窶吐oreign contractual joint venture in Shenyang. Later, in 1996, China's first 100% foreign-owned pharmaceutical company, Eisai (Suzhou) Pharmaceutical Co., Ltd., was established in Jiangsu by the Eisai Group. These two ventures were also a success, with sales of Aricept, Pariet, Methycobal and other major products helping Eisai to become a leader among Japanese pharmaceutical makers in the mainland Chinese market.

In 2004, the company established the first marketing subsidiary to be established in India by a Japanese pharmaceutical company and launched a series of products, including Aricep (the brand name for Aricept in India). The country did not adopt a substance patent system until 2005 and at the time generic drug brands dominated the market. Leveraging its strengths in patient education initiatives and local marketing campaigns, however, Eisai was quickly able to gain ground, and Aricep is currently one of the top donepezil hydrochloride brands in India.

Following its successes in China and India, the Eisai Group continued to expand onto the world stage with strategic entries into other emerging countries in and around 2010, establishing new marketing subsidiaries and branch offices in Russia, Brazil and Mexico.

Yuji Naito, a member of the board and an honorary chairman at Eisai, passed away on October 11, 2005. He was 85 years old.

Yuji had led Eisai from 1966, serving as representative director and president for 22 years. During that time he diversified business operations, achieved global expansion and, even after stepping down from his post, continued to serve at the front lines of management while enjoying a long, fulfilling life.

As a young man, Yuji had been partway through his studies at the Department of Commerce in the Faculty of Economics at Tokyo Imperial University (now Tokyo University) when, in 1943, he was sent to fight in the war under Japan's student mobilization policy. There he became a Zero jet fighter pilot in the naval air force. Near the end of the war, in 1945, he was assigned to a kamikaze special attack squadron. In June of that year, while at the Kanoya Base in Kagoshima awaiting orders, he was transferred to the Matsuyama Base in preparation for an anticipated decisive battle on the Japanese mainland. With this transfer, he was thus spared having to fly a suicide mission. He remained in Matsuyama until the end of the war.

Morphotek Inc. in the United States

As a new strategy fit to continue Eisai's promising start to the 21st century, the mid-term “Dramatic Leap Plan” was rolled out in fiscal 2006. The plan was based on the commitment made in 2005 in Eisai's Articles of Incorporation to develop business activities aimed at improving value for patients by giving first thought to patients and their families, and to focus on becoming a truly global, human health care (hhc) company. It also placed a new-found emphasis on concentrating resources on unmet medical needs, which saw the company make its earnest first step into the field of oncology.

Eisai's own in-house anticancer agent R&D activities began in 1987 with the formation of an oncology research group at the Tsukuba Research Laboratories. Additionally, as its in-house product pipeline in oncology was now steadily increasing, Eisai acquired facilities, technology and new products through three major purchases in three years in order to expand its oncology franchise globally. In 2006, Eisai announced the strategic acquisition of four anticancer agents from U.S.-based Ligand Pharmaceuticals Inc. Next, in 2007, the company purchased Morphotek Inc., a U.S. biotechnology company specializing in antibody drug R&D used in the treatment of cancer. Finally, in 2008, Eisai acquired MGI Pharma, Inc., a U.S. biopharmaceutical firm specializing in oncology and acute care.

In 2010, the anticancer agent Halaven discovered by the Eisai Research Institute of Boston, Inc. (now the Boston Research Institute) was approved in the United States. Research first began on this drug through research on halichondrin B, a highly potent antineoplastic substance that is extracted from Halichondria okadai, a black marine sponge found in shallow waters off Japan. It was this line of research that led to the successful synthesis of eribulin, but only after much challenging work was carried out by dedicated scientists for over ten years. Halaven carried high hopes for Japan窶琶n the field of anticancer pharmaceuticals, which had long been dominated by products from foreign-owned companies, here was a new drug discovered, developed and manufactured entirely by a team that, brought together by Eisai, included some of the biggest and brightest names in modern synthetic organic chemistry in the country.

Tsukuba Knowledge Center, completed in August 2008
(received Good Design Award for fiscal 2009)
European Knowledge Centre, completed in June 2009
Eisai Knowledge Centre, India, completed in December 2009
Koishikawa Knowledge Center, completed in January 2010
(received Nikkei 24th New Office Award)

From 2008 to 2010, with the aim of enabling the exchange of knowledge among its researchers to further accelerate the creation of new drugs, Eisai established a network of knowledge centers in Tsukuba, the United Kingdom, India, and at Eisai's headquarters in Tokyo.

In June 2009, the European Knowledge Centre was completed in Hatfield, Hertfordshire, north of London in the United Kingdom. The center maintains its own research division, as well as a production division窶忍isai's first production base in Europe窶蚤nd marketing division, to effectively oversee all Eisai operations in Europe. The center combines all pharmaceutical business functions, from drug discovery to sales, in one location for the first time in the Group's history, realizing a longstanding dream of the company's founder, Toyoji Naito. The most important facility within the complex is the cafeteria, where employees from various departments are able to gather together in one place to exchange their opinions freely窶杯he aim of the cafeteria is to create a space where innovation can thrive based on knowledge pooled together instantaneously and based on similar experiences.

In a similar move in Vizag in the south of India, the Eisai Knowledge Centre, India was completed in December 2009. This was the first centralized base to be established by Eisai. It carries out process research and formulation production for active pharmaceutical ingredients (APIs) within the one location. As a global supply hub for the Eisai Group, it also plays a central role in the realization of affordable pricing.

Ceremony for the agreement signing with the WHO in January 2012

The 2010 Problem, in which major pharmaceutical products by leading drug makers worldwide faced substance patent expiration, and the issue of the advance of medical cost suppression policies that continue to tighten globally, have contributed to a trend where drug makers in developed countries often stagnate in terms of overall growth in major markets. On the other hand, in emerging economies and developing countries where economic development has been accompanied by astounding growth, the need to improve health welfare, including in regard to pharmaceutical products, is on the rise.

In this era of great globalization in which emerging and developing countries also play a major role in business, Eisai seeks to further contribute to patients in order to complete its transformation into a global top-tier high-performing company. It was against this backdrop that Eisai's mid-term strategic plan “HAYABUSA” was announced in 2011. Under this plan, innovative new drug creation and improved access to medicines in emerging economies and developing countries are major points of focus.

In 2012, as the only Japanese pharmaceutical company among the 13 major drug makers worldwide, Eisai participated in the biggest international public窶菟rivate partnership in history alongside the Bill & Melinda Gates Foundation, the World Health Organization (WHO), and governments of developing countries, among others, with the aim of eliminating ten neglected tropical diseases (NTDs). In line with this alliance, which is known as the London Declaration, Eisai has pledged and signed a contract that states the company will manufacture at its Vizag plant in India approximately 2.2 billion pills for use in the treatment of the NTD lymphatic filariasis and supply them to the WHO at “price zero.” Eisai believes this commitment to be a worthwhile mid-to-long term investment in the creation of future markets based on its hhc philosophy through improving access to medicines, and aims to continue to take the initiative in expanding this and related projects in the future.

The “HAYABUSA” plan was named after the Japanese asteroid probe, the Hayabusa, and embodies the spirit of Eisai employees who aim to overcome whatever challenges they may face to achieve the objectives of a given plan, in the same way that the asteroid probe overcame major crises such as engine trouble and communication blackouts and returned safely to Earth after traveling over six billion km in seven years.

In fiscal 2000, Eisai reevaluated its corporate management and reformed its stance on corporate governance. In addition to significantly reducing the size of its board of directors, Eisai invited outside parties to serve as members of the board and established a Corporate Governance Committee. To achieve this, Eisai also appointed Professor Ichiro Kataoka, a professor emeritus at Keio University, as the first outside member of its board. The company also introduced a system of executive officers, separating the business administration and management oversight functions, and introduced initiatives to enhance governance each year going forward. After these steps were taken, Eisai transitioned to a system of committee management in fiscal 2004 and to this day, Eisai's board of directors has consistently maintained an external director majority.