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Interview with Meiji Seika Pharma: Tradition to drive innovation

An interview with Daikichiro Kobayashi, President of Meiji Seika Pharma Co., Ltd.

By 2050, the population of the world is expected to exceed nine billion. According to the UN’s Food & Agriculture organization, food production will have to increase by 60-70% to feed everyone. What must be done to increase food production by 60-70% by 2050?

The primary focus is innovation. Limitations are met when trying to increase the field for cultivation or water resource. At Meiji Seika Pharma our aim is to improve efficacy, safety and the quality of pesticides for increasing the yields of crop that will be achieved by improvement of pesticides, seeds with GM-technology, fertilizer or others.

The short-term profit oriented vision of certain international players has damaged the reputation of the food industry as a whole. When it comes to business Japanese people have a very different mentality and philosophy. What is the difference in mentality between a Japanese corporation such as Meiji in comparison to a Western One?

Japan always focuses on the farmers in Japan who themselves focus on three things; efficacy, safety and quality. Farmers in Japan produce a lot of varieties and high-quality crops under narrow fields and high pressure of pest and diseases. It is standard practice in Japan to develop pesticides and medicines for farmers and one of the main differences between Japan and other countries is that it is accepted that development will take time.

The industry and the development process are regulated by strict laws. Compared to purchasing outside of Japan, such production is more expensive, however, it was authorized and it has proved to be successful. The end products are not made for a mass market, and as such they have been targeted more towards Japan. Still, it is true that most Japanese companies and also Meiji Seika Pharma are trying to get into overseas market.

Japan holds more patents in the agrochemical industry than any other country in the world, besides the US. However, the biggest names in the business are all foreigners. In the years to come, how well positioned is Japan to take international leadership in this sector?

The market size of Japan was big enough to satisfy the industry but is now decreasing due to the reduction in population. The agrochemical industry of Japan owns many patents based on innovation and has the intention to enter into the overseas market by commercializing products derived from these patents. On the other hand, to expand the business, other than strategy of the industry, Japan is not mainly in M&As to have its own distribution channel with increasing market share but rather in strategic partnering with a variety of corporations like multinationals or local distributors, product by product and country by country.

Meiji Seika Pharma was created in 1916 and has today grown into an important player, with over 140 billion JPY in sales and over 5,000 employees. Can you please give our readers a short overview of Meiji Seika Pharma?

Tokyo Confectionary Co Ltd (now Meiji Seika Pharma) was established in 1916 originally producing sugar to make sweets. Seika literally means confectioners making sweets. In 2011 a subsidiary was created to deal solely with food and medicine, operating as a completely independent entity.

In 1945 - at the end of World War II - the Japanese military began researching penicillin and this marked the start of their journey into producing pharmaceuticals. It was in Japan’s Showa period (1926-1989) that we were considered to be the first penicillin producer in Japan. In 1958 the world-class antibiotic ‘Kanamycin Meiji’ was produced and utilized through the World Health Organization and we have been researching this field ever since.

Could you tell us more about the R&D efforts of your company today?

We created the world’s first and only oral carbapenem antibiotic (Orapenem) which was launched in Japan in 2009. Recently, Meiji Seika Pharma has created an anti-bacterial drug candidate for CRE (Carbapenem-resistant Enterobacteriaceae), and we are currently working in collaboration with Roche to develop more with the expectation that the product line will grow as a drug for antimicrobial-resistant strains.

Three candidates for infection controls are currently in development; ME1100 (treatment for HABP/VABP), OP0595 (collaboration with Roche) and ME1111 (for onychomycosis, a fungal infection between the nail and skin). Today, we are in Phase III of clinical development which includes antipsychotics (ziprasidone, a drug for schizophrenia) which is already being sold on a global level.

There are another two stages in the journey to complete this development: the product launch to the central nerve system (CNS) market. including anti-depression and anti-psychotics (schizophrenia); and then establishing the licensing of in-house developed products to global companies. Another area of research and development in which we are making efforts is in agrochemicals and we are now working in collaboration with other global companies including BASF and Dow Chemiclas.

Inscalis made a lot of noise in Europe and it was truly believed it would be ground breaking for BASF. Could you tell us a little bit more about this project?

Inscalis is a trade name of BASF for afidopyropen or ME-5343 discovered by Meiji and the Kitasato Institute. A high level of expertise in fermentation and chemistry was needed to carry out the research and development for Inscalis. As Prof. Omura and his group have very advanced knowledge and expertise in chemical optimization of compounds from fermentation, we worked in collaboration with them to combine our expertise in this area. We submitted with BASF the application for marketing of Inscalis in the USA, followed by other countries in 2016 and we are waiting the approval by authorities. This product has a very high efficacy on aphids and whitefly and is less harmful to the environment and honeybees, which are critical issues that should be taken very carefully in our industry.

It seems that Meijj Seika Pharma is at a crucial point of its history. On one side you have research and development in medicine, and on the other, the agrochemical side. As you are going to launch many new products in the market, this takes us back to Vision 2026 – this vision to internationalize your company. Could you tell us a little bit more about the midterm strategy of Meiji Seika Pharma that will allow Vision 2026 to be realized?

In order to create the vision and strategy for 2026, we have had to assess Meiji Seika as a whole and determine what are the strengths and competitive advantages of this company, both on the pharmaceutical and agro chemical side of the company. We have identified that one of these strengths lies in fermentation. From the very beginning, with the development of penicillin, we have focused on microbial culture (in terms of cultivation or “microbial product/metabolites” etc.).

The microbial culture (product/metablite) is utilized in both the pharmaceutical and agricultural se¬¬ctors and as such is an fundamental aspect in research, therefore the focus will remain on fermentation for the development of the business in the future. Professor Omura of Kitasato Institutes was awarded the noble prize in 2015 for development of therapies that have revolutionized the treatment (cf. Ivermectin) of some of the most devastating parasitic diseases (such as Onchocerciasis, or “River Blind Disease”) and the pharmaceutical and microbials that he had been working on was at the core of the technology we use. We foresee that this technology will stand out globally. There are an innumerable number of bacteria and thousands of metabolites in a bacterium, but out of those thousands of those metabolites only two or three actually work, so the research and development are on a long-time scale.

Chemicals are in a more advanced stage of development in the western world but we firmly believe that fermentation will take us to the number one position world-wide. Professor Omura’s research was carried out through the implementation of many meticulous and time-encompassing small tasks. For example, when he was travelling he gathered a sample of soil from all the countries he visited. Considerable numbers of strains are isolated from the soil and fermented and microbial colonies are viewed through a microscope to pick up the useful microbial strain, with an aim to developing agrochemical and medicine. In that sense, it is similar to the work at Meiji, it takes a lot of effort but produces excellent quality results.

The method of fermentation is not a new idea but rather traditional in Japan, for example it is used in many Japanese foods including Miso, Soy Sauce, Sake, Mirin (a sweet cooking rice wine) or Rice Vinegar which are some of the roots of Japanese cuisine. So, fermentation is not a new process but it is being applied to a new purpose, namely to fine medical and agrochemical solutions.

With regard to your Vision 2026 could you tell us by region the role of the United States in the internationalization process of Meijj Seika Pharma?

Our 2026 vision incorporates the whole group of Meiji major holdings. Our mission is to answer the people’s needs – worldwide – to promote worldwide wellness. Inscalis has already been applied in the USA with expectations for it to be validated by September 2018. The next stage, is to apply the anti-bacterial pharmaceuticals market. Obviously, the American market is on a lot larger scale than Japan and internalization is required to meet those demands. America tends to be more aware of the importance of environmental issues and as an environmental frontier we perceive our products including Inscalis will be well received in the US.

We are currently developing agrochemicals in India. In the meantime, we are developing partnerships with multinational companies to nurture young Japanese workers with an aim for them to go global in the future.

Have you set an objective for your presidency, that you want to achieve before leaving on your position?

Today we have subsidiary companies in many different countries including Thailand, Indonesia and the UK. I would like to see employees develop and grow strong abilities with the capability to go global and to talk directly to people from different countries in order to carry out progress through cooperation.