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Astellas Pharma’s new internationalization strategy is paying off

Interview - November 4, 2015

Merged from two well-established Japanese pharmaceutical companies in 2005, Astellas Pharma has been very successful, with growth in sales, profit, and R&D expenditure in the past three consecutive years. Focusing on therapy, urology, oncology and transplantations, Chairman Masafumi Nogimori discusses how the company is strengthening its activities to go even more global, as the pharmaceutical industry is being more supported by the Japanese government than ever.



What would you say has been the impact of Abenomics on the pharmaceutical sector and what is Astellas Pharma’s role in the internationalization of the sector?

Thanks to Abenomics, I think the general economic condition in Japan is improving. As you know, employment has decreased significantly.

Abenomics activities and the longevity industry are worldwide important sectors for future growth. We are very happy with the government, it is supporting our activity. The Japanese market is number two after the United States. We would like to have a stronger position as a sector. Astellas and the Japanese pharmaceutical industry are fighting very severe competition among worldwide multinational companies because the Japanese market is a completely open market. 

What separates Japanese pharmaceutical companies and especially Astellas Pharma from international competition?

I think each company has its own strengths. For example, at Astellas, we have our own capacity, and capabilities in transplantation, urology, and oncology pharmaceuticals. Of our businesses, of course the Japanese market is the biggest. The second one is the United States. The third one is European countries. And we have very balanced activities in those three areas. Now, we are putting our effort in expanding our business in Asia and Oceania. 

What do you attribute the company’s growth and sales to?

We merged more than 10 years ago. Our success is the most important thing. It is a very good amalgamation of people. We could create strong fundamentals. People work very hard. From the start of our merger, we put our efforts into being a global category leader. It is our business concept. Being a global category leader means having a leading position in all business processes, development, production, and marketing. We selected two areas at the beginning: transplantation and urology. And in 2006, we selected oncology, which would be the number three pillar in our business.


Are these going to be the three pillars for the foreseeable future?

Yes, we currently want to strengthen our activities in those three areas. We are also trying to strengthen our research in new areas such as muscle diseases, ophthalmic diseases, and cells therapy.


How difficult is it to balance the long-term goals of R&D with the short-term goals of investors and shareholders that want to see a profit?

It is always very difficult. In the short-term, of course we have to achieve reasonable profit for our business. In that sense, the maximization of our current products is indispensable. 

As one of the leading private-sector companies here in healthcare, what opportunities do Japan’s demographic changes present?

The number of senior people will be increasing. In that sense, we need to develop new products for specific diseases which are very common in senior people, such as Alzheimer diseases and various types of oncology diseases. This is very much related to age. 

How do you identify these areas? Do you work with hospitals or doctors? How do you strategize for long-term R&D purposes?

Our profile is very peculiar in comparison with other pharmaceutical companies because we are concentrating our efforts only on prescription drugs. I think we need to create more labor in Japan. That means we are shifting our efforts to promote diversity. 


You have a lot of CSR initiatives. Why are they also important to Astellas?

The whole business is CSR-based, because we need to create new good products for human health. If we develop a new interesting product, of course it can contribute to human health. That is the ideal CSR activity.

How do you capitalize on your R&D strategy? Do you partner with overseas companies or R&D centers in America?

We have limitations in our capacity. In that sense, we can find better talent outside of our company, whether in foreign companies or sometimes competitors. We can be very flexible to make any kind of variances. 

So you are looking for partners in various ways?



How are you working to strengthen your international brand of Astellas and aligning it with Japanese quality efficiency CSR giving back to society?

Under our concept of a global category leader, we aim to be stronger in those areas where we have business now. We want to continue our research to find a new product in that area, such as transplantation and urology – especially in urology, we have already attained the number one position globally. 

So this is one of the strengths that you are communicating with your brand name.

Yes, even in the States we have the strongest position in urology.

What do you think are the weakest points of Astellas Pharma when facing this competition? And how are you overcoming them?

In pharmaceutical areas, we have very strong competition. We can find different ways to overtake the competition, for example. There are so many different types of diseases, I would say there are more than many thousands. We can create this big number with differentiating products. In some therapeutic areas, we compete with one another to develop the same kind of product. However, in different areas, we can be sometimes in the number one position. Even for lung cancer, there are several types of lung cancer products. Some of them are biological, and some of them are chemical. 

You have said that marketing is one of your four core strategies when implementing a new product. How are you overcoming the marketing challenges in very well-developed markets and in Asian economies where you are trying to expand?

It is not so easy, but when we develop a very good product, it is easily sold to doctors. Of course, our medical representatives are doing a very good job with doctors by explaining them the differentiation from other products by our competitors. 

Do you use the brand Japan when speaking to your sales people and bringing your new products to the US? Is that something that something that you capitalize on?

I think that, to some extent, we have already done so. 

One of the most important things for the success of Abenomics is trust and confidence. What role though do you think the private sector plays in building trust and confidence in the Japanese economy? 

Abenomics focuses on the promotion of our activities. It takes us a long time to develop a new product, more than 10 years. It takes some time to realize Abenomics in this sector. But in a short time, we are facing a price cut of our products in Japan, which will be due in April next year. 

So do you consider the international market more favorable for growth?

Yes. Currently, international sales are 40% of our total sales. Almost 30% are from the United States. 

Can you tell us a little but about your latest financial highlights? How has this past year been for Astellas Pharma?

It has been very good. This new strategy of internationalization is paying off I would say.


A lot of Japanese firms would aspire to have the same level of success. What advice would you give to other Japanese chairpersons or CEOs who want to follow the full steps of Astellas Pharma and create a more global company?

Our business situation is different country by country. We have to see the differences, adapt to international markets. We should not put the business the same way in all countries. 

What are the core values of the company?

It is basically teamwork. There are too many things changing. One is that we should change ourselves in accordance with the change of the environment. The second thing is that we should change the tomorrow of our patients by creating innovative products. 

Taking this opportunity to reach to out all the heads of state and top business leaders and politicians, what would you say to the international community who may still be hesitant to invest in Japan’s economy or partner with a Japanese company such as Astellas Pharma?

Regarding the pharmaceutical industry, I think Japan has very good circumstances to invest. Our government has changed their mind to support our business. Also, as I already put in force, new growth to utilize new medicine. We are running the number one position in the sales therapy area. 

You mentioned that you also want to go into the Asian region more aggressively. Which countries would you like to be targeting? Who would you like to reach out and send a message to say ‘Astellas Pharma is your partner in the healthcare and the pharma sector’?

As I mentioned before, we have strengths in urology and transplantation, and recently, we are strengthening our activity in oncology. In those areas, we want to launch our own products in every Asian country.


As Japan leaves behind two decades of poor economic growth and deflation, what do you think the new brand of Japan should be for American? What is the perception they should have when they think of Japan?

The Japanese government is fighting their difficulties to attain a point of primary balance. I suppose the future of the Japanese economic situation will improve. We have a special culture, since Japanese people are very kind, especially with foreigners. We have special hospitality.