Latest / Making Medicine / Japan’s Life Sciences State of Play: The Takeaways You Can’t Miss

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Japan’s Life Sciences State of Play: The Takeaways You Can’t Miss · Making Medicine

0:00
Speaker 1: At Making Medicine. We're reporting on the headlines, not making
0:03
Speaker 1: medical recommendations. For personal health questions, always consult a doctor.
0:08
Speaker 1: Nothing in this episode constitutes investment, financial, or legal advice,
0:12
Speaker 1: and please consult your own advisors before making decisions. Hello everyone,
0:24
Speaker 1: and welcome back to the Making Medicine Podcast, where science,
0:27
Speaker 1: policy and innovation meet. I'm your host, John Stanford, and
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Speaker 1: we're here in Tokyo, Japan. We've been here all week
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Speaker 1: with a set of investors from the United States, meeting
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Speaker 1: with government, meeting with industry, and exploring what's happening in
0:40
Speaker 1: the biotech ecosystem here in Japan. We'll be pulling that
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Speaker 1: apart for this show, so let's get into it. This
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Speaker 1: is a groundbreaking podcast for two reasons. First of all,
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Speaker 1: this is the first Making Medicine podcast with multiple guests,
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Speaker 1: so thank you part of It's also first one being
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Speaker 1: recorded over because we promise viewers you'll never know. But
1:04
Speaker 1: we are truly in Tokyo recording and after a long
1:08
Speaker 1: and busy trip before heading to the airport, so we're
1:11
Speaker 1: here to debrief off of an incredible couple of days.
1:15
Speaker 1: Let's start one of the things in the Making Medicine
1:17
Speaker 1: world is. The guests tend to have pretty impressive bios,
1:21
Speaker 1: so we're gonna skip all of your honors in twelve
1:24
Speaker 1: different degrees and everything that makes you so special. So
1:28
Speaker 1: I'll just let you go around answering two questions, starting here.
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Speaker 2: With Sean, who are you and why did you come
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Speaker 2: to Japan?
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Speaker 3: Well, I'm so glad to be here. So I'm Sean Gandhi.
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Speaker 3: I am part of our US commercial organization at Pfizer,
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Speaker 3: focusing on strategic partnerships, and Japan is just a fantastic
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Speaker 3: place for innovation and I wanted to come to learn
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Speaker 3: more about it and learn more about how that ecosystem
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Speaker 3: can be strengthened even more.
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Speaker 4: I'm Patrick Jordan with novaquest Cap Management. Like Sean and
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Speaker 4: my colleagues, just honored to be here and have an
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Speaker 4: opportunity to engage in such a vibrant market for life
2:09
Speaker 4: science as it's a space that we've been investors in
2:12
Speaker 4: for a long time, and very encouraged to have good
2:16
Speaker 4: meetings over the course of a busy week that shows
2:19
Speaker 4: that there's so much more innovation yet to come.
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Speaker 5: Hi, I'm Heather Berger. I'm involved with a couple of
2:26
Speaker 5: small venture capital funds trying to work with companies and
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Speaker 5: innovation and get them off the ground. I came here
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Speaker 5: also just to test out and learn a lot about
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Speaker 5: the innovation going on here. And one of my funds
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Speaker 5: is actually focused on sort of bridging the gap between
2:42
Speaker 5: the US and Japan. It's called an Ventures, and so
2:46
Speaker 5: I've been able to see sort of first hands some
2:48
Speaker 5: of the initiatives that have been put in place here
2:51
Speaker 5: to really help innovation.
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Speaker 6: Hello. My name is Johannes Friedhoff. I'm CEO at Biolabs
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Speaker 6: and a partner at Mission BioCapital. We invest in early
3:00
Speaker 6: stage startups. I do you want the official reason or
3:05
Speaker 6: the inoficial reasons for coming to.
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Speaker 2: I mean, yeah, I want reason.
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Speaker 6: The official reason is, of course that you know we're
3:12
Speaker 6: growing in Japan, so we've just announced that bilabs will
3:16
Speaker 6: add a second facility at Biolabs Tokyo in mid next year,
3:21
Speaker 6: mid twenty twenty six. And the inofficial reasons, of course,
3:25
Speaker 6: I come for the food, as always we.
3:30
Speaker 3: Do.
3:30
Speaker 1: We agree that the stake the first night was probably
3:32
Speaker 1: one of the most miraculous snakes.
3:35
Speaker 6: I saw my wife La.
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Speaker 1: I don't know what they're doing, but the food is
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Speaker 1: better here. There's just no denying it. And we really
3:44
Speaker 1: appreciate your honus that you scheduled the announcement of Biolabs
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Speaker 1: Tokyo for when we were.
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Speaker 6: Here, so.
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Speaker 2: And congratulations.
3:53
Speaker 6: So stay there.
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Speaker 2: Tell folks.
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Speaker 1: You know what made you double down, because this is
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Speaker 1: the second biolabs so it's first really like independent one,
4:02
Speaker 1: but what made you double down in Japan?
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Speaker 6: So, first of all, for those viewers who might not
4:06
Speaker 6: know of biolabs, we work with early stage founders in
4:10
Speaker 6: life sciences. Most of them are academic scientists, experts in
4:16
Speaker 6: one area or the other when they have the ambition
4:19
Speaker 6: of making products out of their inventions. So we always
4:23
Speaker 6: say it's great if you know that gene or that receptor,
4:27
Speaker 6: but it doesn't really help patients. It needs to arrive
4:30
Speaker 6: in the patient's hands or in the physicians' hands, and
4:34
Speaker 6: so we help people build companies out of ideas. We
4:39
Speaker 6: have that platform called Biolabs and Lab Central in Boston,
4:43
Speaker 6: large communities of innovators where they can come and find
4:47
Speaker 6: fully equipped lab environments for them to do their science
4:51
Speaker 6: and also connect with other stakeholders like Pfizer thankfully as
4:55
Speaker 6: a partner there and many other of your peer big
4:59
Speaker 6: farmer companies are there so that our innovators have the
5:03
Speaker 6: opportunity to connect right away, even in the earliest days
5:07
Speaker 6: of their development as startup companies, with the colleagues who
5:12
Speaker 6: will end up commercializing that. So we've established that years
5:16
Speaker 6: ago in Boston and then grown and now for a
5:19
Speaker 6: couple of years we've been also active in Japan. And
5:24
Speaker 6: so many will be aware that Japan has an excellent
5:29
Speaker 6: basic science community. They've just received the honor of two
5:35
Speaker 6: additional Nobel Prizes in our field, and yet honestly, there
5:40
Speaker 6: hasn't really been a translation that's commensurate with that, and
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Speaker 6: I think that's a pain point for the Japanese ecosystem,
5:50
Speaker 6: and the government has been quite aware of that and
5:52
Speaker 6: they have initiated concerted efforts over the past like five
5:58
Speaker 6: six years to address that. I'll see.
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Speaker 4: One of the things that I'm excited about that business
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Speaker 4: model that you've created here is it feels such an
6:06
Speaker 4: important need for an ecosystem.
6:09
Speaker 6: That's because if you look.
6:10
Speaker 4: At other parts of the world where you've got flourishing biopharma,
6:14
Speaker 4: they've got a strong ecosystem. And then to have now
6:18
Speaker 4: of a physical location where it attracts the innovation but
6:22
Speaker 4: also attracts possible commercial engagement that to me is going
6:27
Speaker 4: to be very helpful to the market.
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Speaker 3: Well, I think what was really fascinating is as as
6:33
Speaker 3: part of our trip here, right, we were at the
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Speaker 3: Science to Startup summit yesterday, and what was really fascinating
6:39
Speaker 3: about listening to these really amazing scientists who've discovered, who
6:44
Speaker 3: discovered incredible things about science and about human health is
6:47
Speaker 3: that they have this amazing scientific base, and by working
6:51
Speaker 3: with their mentors here in Japan, but also with mentors
6:54
Speaker 3: that they were paired with from the United States, they
6:57
Speaker 3: were able to take that science to the next level
6:59
Speaker 3: and so they they were able to turn a new
7:03
Speaker 3: scientific insight into a product that could actually benefit society,
7:08
Speaker 3: benefit patients.
7:10
Speaker 2: Yeast.
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Speaker 1: Yeah, And I thought the conference was incredible and these
7:16
Speaker 1: finalists who came through, I'm curious the prep they said
7:19
Speaker 1: they got for communications. Ye yeah, I've been through pitch
7:23
Speaker 1: sessions in Japan before, and between the language barrier and
7:26
Speaker 1: also the just the academic science focus, not the business focus.
7:32
Speaker 1: Was anybody else struck by how well prepared and how
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Speaker 1: well executed the communication was?
7:39
Speaker 3: I mean, they're they're ready for financing. I mean, this
7:41
Speaker 3: is this could have been. I mean, I knew I
7:43
Speaker 3: was in Japan, but if I didn't know, I would
7:46
Speaker 3: have said, hey, maybe I'm in Cambridge, Massachusetts, or I'm
7:48
Speaker 3: in San Francisco.
7:50
Speaker 6: In some ways, it was like the Iron Chef.
7:52
Speaker 3: Meets the food theme, the food continue talking about food.
8:01
Speaker 2: It's tough to get around, but I mean it is.
8:04
Speaker 2: It is impressive.
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Speaker 5: I think the storytelling piece, right, is something that we
8:09
Speaker 5: take for granted in the US because and we also
8:11
Speaker 5: have stakeholders from the beginning, where you have these biolabs
8:16
Speaker 5: where people say, hey, you have the science. I know
8:18
Speaker 5: you want to look at this, maybe think about this
8:20
Speaker 5: experiment or think about how you can apply it. And
8:24
Speaker 5: these participants at the conference yesterday really had the They
8:28
Speaker 5: were able to tap into those resources and it's amazing
8:31
Speaker 5: what those connections do.
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Speaker 1: It was didn't we see anything, you know, in one
8:36
Speaker 1: of our meetings that government was presenting to us sort
8:39
Speaker 1: of where they're indexing therapeutically. I know, selling genes always
8:43
Speaker 1: been big here to people. And when you think of Japan,
8:46
Speaker 1: do you think of a specific therapeutic area or do
8:48
Speaker 1: you feel like they're begun to play ball in lots
8:51
Speaker 1: of different areas.
8:53
Speaker 6: I would say it's very broad right Like historically, because
8:56
Speaker 6: of the achievements of Yamanaka Sense, they've had a very
9:02
Speaker 6: strong interest in regenerative medicine and stem cell derived approaches.
9:09
Speaker 6: But it's really not that pigeonhole at all. Like you
9:13
Speaker 6: you have amazing Yesterday we saw amazing companies, one working
9:17
Speaker 6: with by specific antibodies, another one working on like there was.
9:20
Speaker 3: A Degrader company. There were a couple of oncology novel
9:24
Speaker 3: oncology therapeutic bacterium transport, there was a bacterial there was
9:29
Speaker 3: a bacterial based treatment, there was a there was a
9:32
Speaker 3: type two diabetes treatment that was a very very innovative.
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Speaker 6: I think there's huge opportunities still. I'm excited about this
9:42
Speaker 6: trip in particular, and I've been coming to Japan now
9:45
Speaker 6: for ten fifteen years on this with this idea, and
9:50
Speaker 6: it's it's really taking off now. I think I think
9:53
Speaker 6: we can say that we have seen multiple prime ministerial
9:57
Speaker 6: administrations common go and yet the through line of they
10:04
Speaker 6: want to support entrepreneurs, They want to build sort of
10:07
Speaker 6: like we have in the United States, an ecosystem that
10:10
Speaker 6: supports the translation of science that's really encouraging it. Right,
10:14
Speaker 6: if you think about it, there's different parties involved and
10:16
Speaker 6: different individuals involved, but that theme is sustainable and so
10:21
Speaker 6: for us, we now see at this conference a much
10:25
Speaker 6: better quality of presenters than we saw at previous such events,
10:30
Speaker 6: and so I think it's worth it. The investment is
10:34
Speaker 6: paying off, and I'm excited about the next five years
10:37
Speaker 6: ten years.
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Speaker 1: Here it does seem I'm well behind you. This is
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Speaker 1: sort of my fourth year of engaging in Japan, and
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Speaker 1: it was the commitment then they said we're serious about
10:49
Speaker 1: the startup ecosystem. And there have been changes in the administration,
10:54
Speaker 1: but this group here all met with MHLW, the Ministry
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Speaker 1: of Health, Labor and Welfare METI, which is sort of
11:01
Speaker 1: the trade and commerce one, and they couldn't have been
11:04
Speaker 1: more clear that they want innovation to come out of Japan,
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Speaker 1: particularly in the life sciences space, and they're dogged about
11:12
Speaker 1: They've stuck with it, and I think you're right. I
11:13
Speaker 1: think it's beginning to pay dividends. But I'm wondering what
11:17
Speaker 1: you know. I spent a lot of time with government stakeholders.
11:20
Speaker 1: You are blessed to spend less what came through in
11:25
Speaker 1: those government meetings that we had.
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Speaker 4: I was surprised, encouraged probably even a better word, how
11:31
Speaker 4: aligned they were on this topic. When you talk to
11:34
Speaker 4: the mhl W, you talk to METI, I mean there
11:37
Speaker 4: was a strong alignment that there is an investment thesis
11:41
Speaker 4: behind this to build an ecosystem to support these seed
11:44
Speaker 4: companies to regain global prominence as an innovator in pharma.
11:51
Speaker 4: That's a hard and heavy lift, but is done by
11:55
Speaker 4: having an alignment that really came through in the meetings.
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Speaker 5: I think something that was interesting and exciting about understanding
12:02
Speaker 5: where the pain points are. I think, you know, in
12:05
Speaker 5: these meetings we saw how much resource is being given
12:08
Speaker 5: to the academics and to the startups to create the science.
12:12
Speaker 5: But I feel like what we heard yesterday is, look,
12:16
Speaker 5: we get it. We're trying to build from the bottom up.
12:19
Speaker 5: We're trying to give this support, but we also know
12:21
Speaker 5: that we need that connection piece layered on top.
12:24
Speaker 3: We need to.
12:25
Speaker 5: Get these people exposed to stakeholders. And I feel like,
12:29
Speaker 5: you know, that has been a lagging part of the system,
12:33
Speaker 5: and from what we heard yesterday, I think it's really
12:36
Speaker 5: starting to get through that we're going to also build
12:39
Speaker 5: these connections. We're going to give you the inputs so
12:41
Speaker 5: that the things that you do, you know, end up
12:44
Speaker 5: at the back end, something that people are really excited
12:47
Speaker 5: about for translational medicine for people.
12:51
Speaker 3: They were very, very forward looking in terms of they
12:55
Speaker 3: recognized what strengths the Japanese ecosystem has, but also what
13:01
Speaker 3: they could learn from other ecosystems, from the United States,
13:04
Speaker 3: from Europe, even from other countries in Asia, and just
13:08
Speaker 3: as very this this strong willingness to say, we want
13:11
Speaker 3: to learn from these other entities. We want them to
13:14
Speaker 3: come advise our startups. They we want them to come
13:17
Speaker 3: advise how we think about the ecosystem. I mean it's
13:21
Speaker 3: it's they get to they get to the best of everything.
13:24
Speaker 2: And they've got this tall task.
13:26
Speaker 1: Not in a in a bad way, but you know,
13:29
Speaker 1: harmony is such a key part of their culture here.
13:32
Speaker 1: But when you think about entrepreneurship, you're you're almost by
13:35
Speaker 1: definition not harmonious. You're raising your hands, I can do
13:39
Speaker 1: it better, which in America we clearly have no problem
13:42
Speaker 1: with anybody with an idea saying I can do.
13:44
Speaker 3: It and for a five million dollars, well I will,
13:47
Speaker 3: I will get you there.
13:48
Speaker 2: Yes, and a billion dollars later, maybe I can't do
13:51
Speaker 2: it better.
13:52
Speaker 1: But here, you know, raising that hand and saying like
13:56
Speaker 1: I've got a business idea to do something different. You know,
14:00
Speaker 1: it's not just government policy. And I like that it
14:02
Speaker 1: comes from the top. I mean, we met with very
14:05
Speaker 1: senior leaders and they kind of said everything's on the table.
14:09
Speaker 1: And I think that it'll be important for the people
14:11
Speaker 1: of Japan to say I can take My government is
14:15
Speaker 1: saying take risk, don't like we will. And I mean
14:18
Speaker 1: we talked about labor laws, we talked about you know,
14:22
Speaker 1: and that there are structural barriers. And so this seems
14:26
Speaker 1: this new administration, building on past administrations, seems to be
14:29
Speaker 1: willing to put just about everything on the table.
14:32
Speaker 5: Yeah.
14:32
Speaker 6: I think the Japanese society is probably least favoring disruption
14:38
Speaker 6: compared to Europe or the United States. Right, Like, we
14:41
Speaker 6: always celebrate that in startup world, like change the status
14:45
Speaker 6: quo and do something new, and so Japan is not
14:48
Speaker 6: really comfortable with that, although they've been at the forefront
14:52
Speaker 6: of technical innovation for decades in the past. Right, But
14:56
Speaker 6: this requires also societal and hierarchical rethinking, right, empowering young
15:02
Speaker 6: people who may not yet have decades of experience and
15:06
Speaker 6: pedigree earned right, and.
15:09
Speaker 3: So even though they're incredibly impressive, yeah they're very talenty,
15:13
Speaker 3: but very very historically you needed to on your stripe
15:16
Speaker 3: to look at the sushi chef who gets to, you know,
15:21
Speaker 3: make rise for ten to fifteen years before they give
15:23
Speaker 3: them them life, right like.
15:26
Speaker 6: It is that the culture of earning your place, and
15:32
Speaker 6: I mean at the same time that leads to excellence
15:35
Speaker 6: in everything that that Japan does. And so now if
15:39
Speaker 6: they put their mind to it of building an entrepreneurial culture,
15:43
Speaker 6: I think I think there's good potential.
15:45
Speaker 4: It'll be key to celebrate those successes because there will
15:48
Speaker 4: be some early winners of people who are I'm going
15:51
Speaker 4: to make the change right and I'll have much more
15:53
Speaker 4: of this entrepreneurial leaning into the possibility of not being successful.
15:57
Speaker 4: But when they are to be held up as this
16:00
Speaker 4: is a paragon for what we're trying to do. It
16:03
Speaker 4: won't be easy and it will take time, but it
16:05
Speaker 4: will get there, and I think it'll get there on
16:07
Speaker 4: the backs of a few early starters it was really
16:11
Speaker 4: ready to be leaders and entrepreneurials.
16:13
Speaker 6: Also, conference is like the one the science to startup
16:17
Speaker 6: conference that we went to. I think where they are
16:20
Speaker 6: bringing the world to meet and an opportunity for the
16:23
Speaker 6: innovators to meet best practices from around the world and
16:27
Speaker 6: experts will really help with that. I think innovation lives
16:32
Speaker 6: off of connecting people from different disciplines, it different cultures
16:36
Speaker 6: and backgrounds on how to problem solve as a team.
16:39
Speaker 3: Right.
16:39
Speaker 6: It's opposed to this often you know academic idea of
16:45
Speaker 6: very vertical depth, where you spend a decade, two or
16:50
Speaker 6: three decades on one problem and now you want to
16:53
Speaker 6: broaden it so that you have a development platform.
16:57
Speaker 1: And I think on that end, you know, during our
17:00
Speaker 1: conversation at S TOO S, we were very fortunate Shiazaki San,
17:05
Speaker 1: you know, a rising star in Japanese politics, came and
17:09
Speaker 1: gave a speech about how committed they are. But one
17:11
Speaker 1: of the things that he wanted to get the word
17:14
Speaker 1: out is they're going to be inviting investors from the
17:18
Speaker 1: United States. They're going to bring you over and he
17:21
Speaker 1: you know, he announced that really at our panel, and
17:25
Speaker 1: you know, I feel like we got to do our
17:26
Speaker 1: job at getting the word out people.
17:28
Speaker 2: People need to get here and see it.
17:30
Speaker 3: That's right, and you need to see it in person.
17:32
Speaker 3: You need to meet the scientists, you need to meet
17:33
Speaker 3: the entrepreneurs and realize that there is a lot happening here.
17:37
Speaker 6: I think I think many people. I mean, look at
17:39
Speaker 6: the turnout even now in terms of international funds that
17:43
Speaker 6: are registering for the Many Aiment program.
17:47
Speaker 1: Can you tell people, I know you're kind of going
17:49
Speaker 1: through the prosecutor about it.
17:51
Speaker 6: Yeah, So there is a program that on the first
17:55
Speaker 6: side for us, seems incredible, incredibly generous of a match
18:00
Speaker 6: grant program. So for as a fund like I can
18:05
Speaker 6: tell the story of my firm. We're currently going through
18:07
Speaker 6: the process of getting Mission BioCapital accredited with the system,
18:11
Speaker 6: and so that means they want to check you out
18:14
Speaker 6: as a fund so that you know what you're doing,
18:16
Speaker 6: your real life science investor with a track cricket and
18:18
Speaker 6: you bring some expertise to this. Once you're part of
18:22
Speaker 6: the program, you're now eligible to have your investments in
18:26
Speaker 6: Japanese startups matched, not through additional equity investment, but it's
18:32
Speaker 6: an actual grant, some non capital that comes to benefit
18:37
Speaker 6: the science of the company, and it's a two to
18:40
Speaker 6: one ratio. So if you do the math, it's more
18:43
Speaker 6: generous than anything I've seen in matching programs in the
18:46
Speaker 6: United States so far. I hope, I hope it's a
18:49
Speaker 6: sustained effort. I hope we'll get in there quick. And
18:54
Speaker 6: you see that many US based and European funds are
18:58
Speaker 6: already engaging in this program. I think A and Venture
19:01
Speaker 6: is one of the very first ones that involved, right.
19:03
Speaker 5: And it's it's an amazing way even to think about
19:06
Speaker 5: smaller companies, smaller venture capital funds that say, hey, look
19:10
Speaker 5: if I give you five million, now you have fifteen.
19:12
Speaker 3: So this force multipliers.
19:14
Speaker 5: Yeah, it's kind of crazy and it enables, you know,
19:18
Speaker 5: let's move fast and break things a little, which is
19:20
Speaker 5: kind of counterculture, right, but it at least gives you
19:23
Speaker 5: that that fuel for the fire.
19:24
Speaker 6: I would want to I would want to say, I
19:26
Speaker 6: would not want to say it's crazy because maybe the
19:28
Speaker 6: Japanese listen in. I would want to say, it's very looking,
19:34
Speaker 6: it's very forward looking. It's a it's a model that
19:36
Speaker 6: I wish other like. I'm I'm talking with politicians in
19:40
Speaker 6: Germany a lot. Germany in many cases has many of
19:44
Speaker 6: the same structural hindrances that we look at in Japan,
19:48
Speaker 6: and a program like that could really fuel and supercharge
19:53
Speaker 6: innovation in other places as well.
19:55
Speaker 2: I've always sort of called it in my head.
19:57
Speaker 1: SBI R on stereoister, because it is incredibly generous and
20:03
Speaker 1: just to kind of put this in terms, one of
20:04
Speaker 1: the companies to tell me, you know, almost sixty million
20:08
Speaker 1: in funding for a specific portfolio company. I mean, that's
20:11
Speaker 1: we don't have that and we can't even turn our
20:14
Speaker 1: SBR program back on. But that's for a different episode.
20:19
Speaker 1: But they soon, Toody, I know, and it sounds like
20:23
Speaker 1: our government has reoed. All it took was us five
20:26
Speaker 1: getting out of the contact.
20:28
Speaker 2: But it does.
20:29
Speaker 1: Seem they seem really committed. And Heather, I know you've
20:31
Speaker 1: taken advantage of was it another program then.
20:35
Speaker 5: Yeah, that MHLW actually has some smaller grant money that
20:39
Speaker 5: they've given and they're calling it these clusters. So not
20:42
Speaker 5: necessarily for vivo experiments or clinical trials which are more
20:46
Speaker 5: expensive and later, but even for smaller startups. So we're
20:49
Speaker 5: working on an incubation of the technology and we've got
20:54
Speaker 5: you know, close to a million dollars to run some
20:56
Speaker 5: proof of concept mouse models, you know, and it's it's
21:00
Speaker 5: we would have never at this stage of the company been.
21:04
Speaker 5: You know, we're kind of taking some baby steps feeling
21:06
Speaker 5: out the science, but this enables us to in parallel
21:09
Speaker 5: really saying, you know what, let's give this a shot.
21:11
Speaker 2: Let's see this technology really works.
21:13
Speaker 1: It's dawning on me by the way that I have
21:15
Speaker 1: the entire ecosystem here. This is because, you know, they
21:20
Speaker 1: seem very committed, and I think in one of our
21:23
Speaker 1: meetings with one of some of the LDP leadership, you know,
21:27
Speaker 1: I think they want to.
21:27
Speaker 2: Know what else they have to do.
21:30
Speaker 1: I'll say for me, one of the disconnect maybe too
21:33
Speaker 1: strong a word, but one of the absent forces in
21:36
Speaker 1: those diagrams of the startup ecosystem was the importance of
21:41
Speaker 1: the large manufacturers. As I look at a large manufacturer,
21:44
Speaker 1: I'm curious if that came through from me, like a
21:47
Speaker 1: little cognitive dissonance of like, we are going to absolutely
21:50
Speaker 1: blow early stage out out of the water. But I
21:53
Speaker 1: didn't see the prioritization of saying and then they're going
21:55
Speaker 1: to get acquired and we're going to build super successful
21:59
Speaker 1: large farming here.
22:00
Speaker 3: So you know, I think I think it was implicit
22:03
Speaker 3: in a lot of the discussions that we had that
22:06
Speaker 3: you know, large manufacturers have a role in offering like
22:10
Speaker 3: broader guidance about the ecosystem. Uh, they obviously have a
22:14
Speaker 3: significant role in commercializing, manufacturing, distributing medicines around the world.
22:20
Speaker 3: And so you know, if they're thinking, if the ecosystem
22:26
Speaker 3: is thinking about building up its early biotech infrastructure, right,
22:29
Speaker 3: you start with that infrastructure, and then as it grows,
22:32
Speaker 3: that's when it starts. That's when you start having much
22:35
Speaker 3: more interaction with with larger manufacturers. The molecules, the assets
22:40
Speaker 3: are now getting to a point where those types of interactions,
22:44
Speaker 3: those types of collaborations start to make a lot of sense.
22:48
Speaker 1: And I think, like for the R and D jobs
22:50
Speaker 1: that they want, it is great to build up the
22:53
Speaker 1: small biotech evesystem, but I think the force multiplier can
22:57
Speaker 1: be recruit some back because they really did lose so
23:00
Speaker 1: many of the large companies.
23:02
Speaker 2: Get them back, track them back and get the.
23:06
Speaker 1: Economic benefits, let alone the patient benefits, which you know,
23:11
Speaker 1: changing gears to the patient.
23:13
Speaker 6: Here a little bit.
23:15
Speaker 1: We do come and I think something else that was
23:17
Speaker 1: visible to me is drug lag, drug loss. This idea
23:21
Speaker 1: that most new medicines are not available in Japan.
23:24
Speaker 6: I think you have to explain that again, right, which
23:26
Speaker 6: is that since I think it started really in twenty
23:29
Speaker 6: fifteen with was a Gilead and the HCV drugs that
23:37
Speaker 6: somewhat broke the back of the Japanese system and that
23:40
Speaker 6: created a backlash where they said, nope, we're not going
23:45
Speaker 6: to pay for those anymore. And since then there's dozens
23:50
Speaker 6: of drugs that are approved in the US and Europe
23:54
Speaker 6: that haven't made their way into Japan. And so a
23:58
Speaker 6: couple of years when I was here for one of
24:01
Speaker 6: these conferences, they they also had patients, stakeholders, Japanese patients
24:05
Speaker 6: speaking to their own politicians to highlight this, like they
24:08
Speaker 6: have a child with a genetic condition right that you
24:11
Speaker 6: could could treat well in the United States now, and
24:14
Speaker 6: yet in Japan, one of our leading industrialized countries, they
24:17
Speaker 6: do not have access to this medication. And so I
24:19
Speaker 6: think that is starting to create a real and invisible
24:22
Speaker 6: pain point for politicians that they must address.
24:25
Speaker 1: And it's not just Gilead and the megacaps. You know
24:31
Speaker 1: they're passing on. Not to put you on the spot here, Patrick,
24:34
Speaker 1: but you've had some experience here even on a smaller
24:38
Speaker 1: company side, and you know, well, you try to enter
24:42
Speaker 1: this market and it didn't really work out.
24:44
Speaker 4: Yeah, it's a it's a it's a tough one, you know.
24:47
Speaker 4: And it's not only a tough kind of financially and strategically,
24:50
Speaker 4: it can be tough emotionally. When you've got an important
24:53
Speaker 4: therapeutic with incredible success in clinical trials, and yet when
24:58
Speaker 4: you start to consider how do you make that available
25:00
Speaker 4: to the market where the pricing system simply isn't rewarding
25:06
Speaker 4: effectively the innovation, even to the point where the rewards
25:10
Speaker 4: aren't enough to even justify manufacturing the product, it sets
25:15
Speaker 4: off a whole different set of decisions that you consider. Now,
25:19
Speaker 4: what about abandoning these patients that have these conditions that
25:23
Speaker 4: are now unmet medical needs. Put that against a backdrop
25:26
Speaker 4: of an aging population where so much more of the
25:30
Speaker 4: pharmacopeia and the US and Europe is kind of gearing
25:34
Speaker 4: toward and that's going to be a kind of a
25:36
Speaker 4: blind spot for a market. So I think, while I'm
25:40
Speaker 4: incredibly encouraged by the efforts to support innovation at the
25:45
Speaker 4: early stage, I would advise think about how do we
25:50
Speaker 4: make the back back end of this process, the commercial
25:53
Speaker 4: environment equally attractive.
25:56
Speaker 2: And I think that came through.
25:57
Speaker 1: I was actually very positive of sort of valuing innovation
26:02
Speaker 1: across the value chain is the recipe. And you know,
26:09
Speaker 1: I kept on saying, you say quath throughout the whole trip.
26:13
Speaker 1: I don't know why Kendall Square works, but I know
26:15
Speaker 1: that it was just lab Central.
26:18
Speaker 2: You know, if it was just lab Central, Kendl Square
26:19
Speaker 2: would still be.
26:21
Speaker 1: But the presence of of large and small integrated, and
26:28
Speaker 1: we get in Japan's no no outlier. Here in the US.
26:32
Speaker 1: We deal with this all the time. A champion for
26:35
Speaker 1: small biotechs from a policymaker saying, oh, I love small biotech.
26:38
Speaker 1: I want in my backyard. But some of the policies
26:41
Speaker 1: they're also backing don't help the end of the value
26:45
Speaker 1: chain that Frankly.
26:46
Speaker 6: Has a talking about Massachusetts.
26:51
Speaker 1: Somebody's righting about a paradox, but it's it's I don't
26:57
Speaker 1: want to frame it as like a uniquely Japanese thing,
27:00
Speaker 1: like everybody loves small.
27:01
Speaker 2: Biotech, but they struggle to see just that it is
27:05
Speaker 2: in the system.
27:05
Speaker 3: It has to inv These medicines have to go someplace,
27:08
Speaker 3: they have to they have to finish their development so
27:11
Speaker 3: that they can actually be distributed.
27:12
Speaker 6: Yeah, they're very clearly part of as as the early
27:17
Speaker 6: innovators that sort of I represent, We're very clearly part
27:19
Speaker 6: of a relay. I describe it as a relay, right,
27:22
Speaker 6: that's right, right, Like you take the baton, you start
27:25
Speaker 6: at the start line, and then there you run. Like
27:28
Speaker 6: our people, they run from discovery to you know, development
27:33
Speaker 6: candidate I ind early clinical. Eventually they hand over the baton,
27:36
Speaker 6: the molecule, the idea of the concept to in many
27:40
Speaker 6: cases the pharmaceutical partners who are very well suited for
27:44
Speaker 6: the larger scale development, clinical development, dealing with the regulatory authorities,
27:49
Speaker 6: and then ultimately getting paid for it. And so one
27:52
Speaker 6: does not work without the other. We do need, honestly,
27:57
Speaker 6: talking about capitalistic incentives. Do need the investment that we
28:02
Speaker 6: all put in as early stage investors to be rewarded
28:05
Speaker 6: or else there will be no further capital coming our way.
28:09
Speaker 6: We need a balance of input and output in terms
28:12
Speaker 6: of at risk capital. And so even in the US
28:18
Speaker 6: we've had a period recently where the returns we didn't
28:21
Speaker 6: really see exits, right, And when VC doesn't see egg
28:26
Speaker 6: don't see exits, then they will have a hard time
28:30
Speaker 6: investing in early stage companies. Again, not taking that risk, right,
28:35
Speaker 6: and so there needs to be a certain balance of
28:39
Speaker 6: money investing in early stage concepts and then returns through exit.
28:43
Speaker 6: Those could be trade sales partnerships with larger farms, sougual companies,
28:48
Speaker 6: or the ability to take our companies to the public
28:52
Speaker 6: markets and monetizing that way. So we very clearly feel
28:56
Speaker 6: that needed integration and partnership, honestly with between the innovators
29:01
Speaker 6: and the pharmaceutical companies. And I really don't understand why
29:09
Speaker 6: we are why we're doing such a bad job explaining
29:13
Speaker 6: that to the public, even in the United States, right. Unfortunately,
29:17
Speaker 6: the pharmaceutical industry does not have a great reputation with
29:20
Speaker 6: the public. And yet we all benefit from the achievements, right,
29:25
Speaker 6: like why does Grandma live longer? Why do we have
29:27
Speaker 6: a treatment for my friends cancer? Right because of innovation
29:31
Speaker 6: of the work that we've done.
29:33
Speaker 1: And you know, and there was sort of a US
29:36
Speaker 1: specter overlaying all this is were in the environment of
29:40
Speaker 1: MFN and you know, the President was just here and
29:44
Speaker 1: five hundred and fifty billion coming from Japan to the
29:48
Speaker 1: US as part of bilateral you know, fixing that trade deficit.
29:54
Speaker 2: But better believe President Trump wants to see them.
29:57
Speaker 1: Also quote paying their share, and I think one of
30:02
Speaker 1: the things that came through also is concern about how
30:06
Speaker 1: a US domestic policy could put huge pressures on their
30:09
Speaker 1: system here, and I think that's something that will play
30:11
Speaker 1: out over the next year or two.
30:13
Speaker 3: That's right, That's right. It's really unclear where it's going
30:15
Speaker 3: to go, and it depends on how different stakeholders decide.
30:19
Speaker 6: Yeah, I think the Europeans are facing that reality very clearly,
30:26
Speaker 6: that US pricing will likely be benchmarked based on non
30:32
Speaker 6: US country is paying, and so that there will be
30:36
Speaker 6: a lot of pressure on prices upward, pressure on prices
30:41
Speaker 6: on those geographies, and eventually maybe there will be a
30:44
Speaker 6: much more balanced pricing system. I don't think we will
30:49
Speaker 6: see pharma eating losses of revenue easily, right. They will
30:55
Speaker 6: put up a strong fight, and they should. We need
30:58
Speaker 6: we need that revenue to come into the system in
31:01
Speaker 6: order to fuel novel innovation. Otherwise the alternative, let's also
31:05
Speaker 6: face the alternative is that we have a decent stable
31:09
Speaker 6: of drugs right now, right, and we can we can
31:12
Speaker 6: work with.
31:12
Speaker 3: Them, but then you can just let them, let them
31:14
Speaker 3: run off.
31:15
Speaker 6: But then there's no novel innovation. At one point I
31:19
Speaker 6: worked as a young physician and late medical student. I
31:23
Speaker 6: worked in Zimbabwe and we had a list of one
31:25
Speaker 6: hundred essential drugs by the WHO. That means you can't
31:29
Speaker 6: treat a headache, you can't treat a bleeding, you can't
31:32
Speaker 6: treat an infection. But those are drugs that were invented
31:35
Speaker 6: in the seventies and eighties and they work. But if
31:40
Speaker 6: you have a patient with the cancer E leukemia, they
31:43
Speaker 6: will not survive, right, they don't have an option.
31:47
Speaker 3: Those treatments weren't on the list.
31:49
Speaker 6: They are not on the list yet. And so I
31:51
Speaker 6: want to make very clear to people that yes, we
31:55
Speaker 6: have drugs today, but they've gotten very much better over
31:59
Speaker 6: the last ten and twenty years. And that's why we
32:03
Speaker 6: see these advances, especially in oncology, especially now in neurodegenerative
32:08
Speaker 6: diseases and others audimmune we've seen a ton of progress
32:12
Speaker 6: and that's all due to novel medications that we didn't
32:15
Speaker 6: have in the seventies and eighties and nineties, right, And
32:18
Speaker 6: so people need to be aware of what are the
32:21
Speaker 6: alternatives if you stop innovating on novel medicines, right, it's
32:26
Speaker 6: not a pretty picture.
32:27
Speaker 1: It's not you know, over dinner and things like that.
32:32
Speaker 1: I'm not looking at you because I'm gonna mention that.
32:35
Speaker 6: And you know, I think that was.
32:37
Speaker 1: One of the big takeaways in our ecosystem is Okay,
32:40
Speaker 1: this capital is exiting.
32:42
Speaker 2: It can get put back to work.
32:43
Speaker 1: And we were looking at specific funds that had huge
32:46
Speaker 1: returns out of that deal, and it's kind of like, Okay,
32:49
Speaker 1: those are the people to head up for the next
32:50
Speaker 1: deal because they're they've got to put that money back
32:53
Speaker 1: to work.
32:54
Speaker 2: It doesn't it doesn't really exit.
32:55
Speaker 3: It doesn't exit the system. They'll reinvest, they'll reinvest.
32:59
Speaker 2: In the system.
33:00
Speaker 1: So that is a bright spot I think for for
33:03
Speaker 1: this something I didn't say. I'm curious if you picked
33:06
Speaker 1: up anything on this. We spent so much time in
33:08
Speaker 1: the US talking about China. I didn't feel the specter
33:13
Speaker 1: of China here very much. I'm curious if you all did.
33:18
Speaker 1: It's so much closer. It's so much, so much closer.
33:23
Speaker 3: You know, it's a I get the sense that in
33:27
Speaker 3: Japan there are many scientific capabilities that they're excellent at
33:31
Speaker 3: and they're really focusing on that and focusing on building
33:34
Speaker 3: that up like it's it's one thing to think about
33:38
Speaker 3: a potential competitor down the road. It's another thing to say,
33:41
Speaker 3: let's like build up or infrastructure now and in preparation
33:45
Speaker 3: for something down the road.
33:46
Speaker 1: Gosh, maybe we have something to learn about that way,
33:51
Speaker 1: because we're doing just the opposite we're saying we are.
33:53
Speaker 1: We're going in the wrong direction. We're putting up these
33:56
Speaker 1: red lights. China's putting up green lights. And I like
33:58
Speaker 1: your pointing, like Japan's heads down.
34:00
Speaker 3: Like let's just get let's let's do work. Let's get
34:02
Speaker 3: back to work. We got all.
34:06
Speaker 2: Let's get back to its.
34:07
Speaker 5: Manufacturer, run some studies in China.
34:09
Speaker 3: Let's do it. Let's go.
34:10
Speaker 5: And there's no barriers there, right, that's right for the team.
34:13
Speaker 5: You know, where where are we going to make our
34:15
Speaker 5: molecules test? They're they're like, there's a lot of good
34:18
Speaker 5: Chinese cdmos, let's just use them, and there's no barrier
34:21
Speaker 5: to that.
34:22
Speaker 3: There's no barrier. There's like every country has its own
34:26
Speaker 3: unique advantages, and let's like double down on the advantages
34:30
Speaker 3: that we have instead of complain about, uh, oh, you
34:34
Speaker 3: know this, this entity is getting this, they're getting that. Like,
34:38
Speaker 3: let's focus on what we're really good at.
34:39
Speaker 2: Incredible conversation.
34:41
Speaker 1: We have optimized and we know the magic length of these,
34:44
Speaker 1: so you got time to probably sort of like closing thoughts.
34:48
Speaker 1: Would you come back to Japan? Are you excited? Food
34:51
Speaker 1: is good and anything? What what stood out to you
34:56
Speaker 1: is you kind of pass this. And one of the
34:58
Speaker 1: goals of this episode is that, like, if someone's going
35:00
Speaker 1: to come to Japan or they're thinking about coming to
35:02
Speaker 1: Japan from our ecosystem, listen to this, like let this
35:06
Speaker 1: be your crash course into it, so give parting wisdom
35:09
Speaker 1: to all those who shall follow.
35:11
Speaker 4: I'll definitely want to be back because in a lot
35:14
Speaker 4: of ways, what we saw over the course of this
35:16
Speaker 4: week and at the S twos conference, it's like reading
35:19
Speaker 4: the first chapter of what's going to be a really
35:23
Speaker 4: exciting book, and it will continue to grow and develop
35:27
Speaker 4: as just as these companies are growing and developing, their
35:30
Speaker 4: technologies advance, becoming more and more investment grade for private equity,
35:36
Speaker 4: certainly for venture capital now. So yeah, I want to
35:39
Speaker 4: see how this continues to unfold. Very encouraged to know
35:43
Speaker 4: that it has such a groundswell of support within the
35:46
Speaker 4: government and unified and the support from what we've heard
35:49
Speaker 4: from MHLW and Metti. So yeah, I'm really encouraged by
35:54
Speaker 4: it and look forward to being a part of it.
35:56
Speaker 1: Bullish you'll be here for episode two.
35:59
Speaker 2: Films about you.
36:03
Speaker 5: I mean, I think the opportunity is an exciting one.
36:06
Speaker 2: I think we're at the first stage.
36:07
Speaker 3: To your point, I think some of it they're gonna
36:11
Speaker 3: need there.
36:12
Speaker 5: There needs to be a continued interaction of not just
36:15
Speaker 5: celebrating the successes, but also celebrating you tried something. Maybe
36:19
Speaker 5: this isn't going to work, but you've got all these
36:21
Speaker 5: other ideas. That's going to be the next phase. And
36:24
Speaker 5: I think getting support internationally, getting vcs in people that
36:29
Speaker 5: are like, don't be afraid to fail. It's not just
36:32
Speaker 5: risk capital, but it's like risk entrepreneurship a little bit.
36:36
Speaker 2: And that is starting and.
36:38
Speaker 5: We see the seeds of it and we see people
36:40
Speaker 5: starting to go down that path. And I think the
36:44
Speaker 5: more we can come here, the more we learn about
36:46
Speaker 5: the science, the more we can sort of support that
36:49
Speaker 5: risk the risk, the more exciting.
36:52
Speaker 2: It will be.
36:53
Speaker 6: Will certainly be back. We have no buildings, so.
37:00
Speaker 3: So how have you agreed to host us next time?
37:04
Speaker 6: I mean it, I think we should. We should definitely
37:07
Speaker 6: bring people over to our new facility. It'll be ready
37:10
Speaker 6: you know, mid next mid twenty six for people to
37:14
Speaker 6: move in and hopefully earlier to host events like these. Yeah,
37:18
Speaker 6: I'm bullish on the Japanese opportunity. We believe that this
37:23
Speaker 6: Bio Labs in Tokyo is not going to be the
37:26
Speaker 6: only major city in Japan that we bring our program to.
37:30
Speaker 6: There are others that we're talking with, and there's really
37:33
Speaker 6: good talent. It's a big country, right, and it's one
37:36
Speaker 6: that's built on education and you know, diligent work, and
37:42
Speaker 6: so I do believe there's more opportunity there. There ask
37:45
Speaker 6: a lot of structural issues that some of them are
37:49
Speaker 6: being addressed already. Others still have to do work, but
37:54
Speaker 6: it's moving in the right direction. And if there's a
37:56
Speaker 6: reason to come back to Japan, ill I will be
37:58
Speaker 6: part of.
37:59
Speaker 1: It, and it might make some reservations.
38:02
Speaker 3: Well, yeah, the list. I think there are a lot
38:07
Speaker 3: of geographies around the world that see the biopharmaceutical industry
38:11
Speaker 3: as this amazing sector to uh create products that change
38:16
Speaker 3: patients' lives, that create jobs, that create economic activity, and
38:21
Speaker 3: so I'm really looking forward to coming back and seeing
38:24
Speaker 3: Japan think about this in a very systematic.
38:28
Speaker 6: Thoughtful way.
38:29
Speaker 3: It's almost like Japan's writing a playbook for if you
38:33
Speaker 3: are a geography that wants to build a biopharmaceutical sector
38:37
Speaker 3: and build a vibrant one, here's how you do it.
38:40
Speaker 3: And they're there. We're seeing this playbook unfold in a
38:43
Speaker 3: real time.
38:44
Speaker 2: That's a great spot to leave it because it's also
38:46
Speaker 2: on a positive note.
38:48
Speaker 6: I think.
38:48
Speaker 1: I think sometimes in the US we don't feel the
38:51
Speaker 1: love as our industry. As Thanksgiving approaches, I'll probably have
38:55
Speaker 1: to explain what I do for a living. If they
39:01
Speaker 1: really welcomed us, they want what we have, sure, and
39:04
Speaker 1: I'm so grateful.
39:05
Speaker 3: And in like a non competitive way, right, Like, there's
39:08
Speaker 3: there's so much we can do together. There is so
39:11
Speaker 3: much unmet need in the world, and it's not up
39:15
Speaker 3: to just one country or one entity to solve all
39:18
Speaker 3: those problems. We actually have to we have to work
39:20
Speaker 3: on it together.
39:21
Speaker 2: Well that's that.
39:23
Speaker 1: Apparently multi person outside country episodes are the best. So
39:30
Speaker 1: everybody have safe travels home and you know, find a
39:33
Speaker 1: good restaurant to ease your way back into life at home.
39:41
Speaker 1: That's all for this week's episode of the Making Medicine
39:43
Speaker 1: Podcasts from Here in Tokyo, Japan. I'm so grateful to Johannes,
39:47
Speaker 1: to Patrick, to Sean, and to Heather for taking time
39:50
Speaker 1: to come all the way around the world to see
39:52
Speaker 1: what's happening in biotech and sharing their thoughts here today.
39:55
Speaker 1: Do you have thoughts about Japan, Drop a comment in
39:58
Speaker 1: the comments section and we'll get to it next week.
40:01
Speaker 1: If you're not already following us, follow us on LinkedIn,
40:04
Speaker 1: X and Instagram with links in the description, and as
40:07
Speaker 1: always from Tokyo, keep itvating.