The new pricing system adopted in Japan from April -2014 (Annexure 1) is a game changer initiative. It pains most of the companies - whether generic or innovator. The most of the companies are revalidating their domestic (and thus overseas) strategies to adopt with new regulations. For the innovators - testing Authorized Generics (AGs) phenomenon for protecting their long-listed sales against generic could be one of new choice in Japan. The format and regulations for AG's are still not clear in Japan, however with the largest Japanese product Blopress AG's launched recently and generic companies in queue to compete with their generic versions will make the things lucid for the fate of AG's in Japan. For most of the generic companies focusing on reducing manufacturing costs, and for many of them to venture in biosimilars space as a new growth avenue would be focus. The trends suggest that Japanese companies may need to set up or alliance with companies overseas for manufacturing. In this note of Outlook-15, we look deeper into these trends to anticipate likely near term changes of Japanese pharma industry. In innovation space, after Oncology, regenerative medicine and Orphan disease are the areas where Japanese innovator companies are focusing its R & D efforts. While from late stage pipeline/new launch, Edoxaban, Lenvatinib, Entyvio, Brintellix, and Ixazomib are the few important NCEs, uptake of which will decide Japanese Innovator growth in Global market. In this report- We analyzed pipeline, strategies and key growth drivers of 13 major Japanese biopharma companies (Pure play innovators/ Innovators+ Generics/Pure play generics) and detailed our view on these growth drivers along with their interest for inlicensing external innovation from the globe for increasing R&D productivity.

Companies Mentioned

Astellas, Chugai,Daiichi Sankyo, Dainippon Sumitomo Pharma, Eisai, Kyowa Hakko Kirin, Meiji Seika, Mitsubishi Tanabe, Shionogi, Symbio, Takeda, Towa, Sawai, Nippon Chemiphar

2015 -Year Watch out for Authorized Generics (AGs), Biosimilars and Overseas Strategic Initiatives

Company Analysis:
Astellas - Xtandi uptake in Pre-chemPC, Isavuconazole US approval & Uptake will provide cushion tNext batch of innovation (Roxadustat, CMV vaccine, ASP8273)!
Xtandi- Xtandi's early stage clinical data in HER2 positive, HR+ve, AR +ve Breast cancer and Data from TERRAIN/STRIVE study in early PC will drive Xtandi momentum in 2015, while PhIII data read out of ARN-509 from SPARTAN study is the key near term threat
Isavuconazole: Our view on US approval and Uptake
Myrbetriq: Myrbetriq uptake in OAB market - a blockbuster potential likely- EB178 (FDC/combof Solifenacin+ Mirabegron) combination - Next Batch of Innovation
Roxadustat- Can change the current treatment paradigm mainly in CKD-NDPatients- AKB-6548 is the key competitor
Key advantage over current EPO
Biosimilar EPis not a threat
Pipeline HIF inhibitors and clinical data comparison
ASP-8273 (Ph 1, Irreversible mutant selective EGFR inhibitor)
Evolocumab
Table 1: Deals done by Astellas in 2013, 2014
Table 2: Pipeline Early stage Androgen Receptor antagonist
Table 3: Competitive landscape for Antifungals
Table 4: Competitive landscapes for OAB drugs
Table 5: Pipeline HIF alpha stabilizer- AKEBIA AKB-6548 is closest competitor
Table 6: Competitive landscape- Anti PCSK9 MAB- ALIROCUMAB vs. EVOLOCUMAB
Chart: 1, 2 - Current and Future use of anti androgens in treatment of Prostate Cancer Chugai - Alectinib, ACE910 Global Success - Next Growth Driver!

Chugai's - Breast Cancer Franchisee: Breast Cancer Franchise-
Perjeta will be the key growth driver for the franchisee-not Kadcyla -
In long term, Perjeta + Herceptin + Chemwill be the standard of care vs. currently Herceptin + chemo. Kadcyla will cater 2nd line market, while data from APHINITY trial in 2016 will decide Perjeta + Herceptin use for adjuvant setting in Breast cancer
Failure of MARIANNE Study further increases threat of Herceptin biosimilar
Chugai's NSCLC franchisee:
MPDL3280A (anti-PDL1 mAB, PhIII, NSCLC, Melanoma) - It is in PhIII in Japan and for NSCLC indication- Nivolumab is the closest competitor.
April 2014 price cut tLong listed products resulted in sales decline of Suvenyl, Sigmart and Alfarol ?.
MPDL3280A - Anti PD1 from Roche- competitive landscape and status in Japan
Table 1: Deals Done By Chugai Pharma in 2013-2014
Table 2: Ongoing Important Clinical Studies of Kadcyla in Late Stage Her 2 Positive Cancers
Table 3: Actemra - Ongoing Global Trials

Daiichi Sanky-Edoxaban uptake + Ranbaxy/Sun Closure will provide Momentum in 2015!
Ranbaxy +Sun= Sun = 9% equity stake in New Sun- Exit or hold???-
Vision 2017 Revision is expected around FY03/15 results:
Edoxaban: A blockbuster potential likely despite restricted US launch and will be 4th Entrant in NOAC market
Acquisition of Ambit bioscience
Quizaritinib
Other Assets from Ambit
Other Assets in Pipeline- CL 108 and Etanercept biosimilar
JP domestic market - Long listed products sales decline?..
Daiichi SankyEspha (DSE) - New pricing policy make difficult road ahead
Table 1: Edoxaban - Possible ScenariAnalysis and Peak Sales Estimate
Table 2: % Patients Crcl Table 3: Launched Noac- Efficacy And Safety Comparision - In Renally Imparied Patients
Table 4: Launched Noac- Ww Reported Sales
Table 5: Competitive Landscape - Select Late And Mid Stage Drug Targeting Aml
Table 6: Select Jak 2/1 Inhibitors: Mid- TLate-Stage Pipeline
Annexure 1: 5-Year Business Plan: Numerical Targets For Fy2017
Annexure 2: Core Strategies Of 5-Year Business Plan
Annexure-3: New Generation Oral Anticoagulants - Market Dynamics

Dainippon SumitomPharma - Latuda growth is the Key tsupport Regenerative/Cell therapy Innovation!
BBI-608 - Post failure in PhIII CRC (Colorectal cancer) study, focus now shifts tPhIII clinical data
Pipeline CSC Inhibitors
BBI-503- Clinical data from PhI/II study in 2015 will decide its future potential-BBI-503
Regenerative medicine/Cell therapy medicine - A long way tgo!!!-SB623

Other Pipeline candidates:
EPI-743
AS-3201 (Ranirestat)
DSP-1747
Dasotraline
Table 1: Pipeline Of Drugs Targeting Cancer Stem Cell
Table 2: Pipeline Of Boston Biomedical
Table 3: Psychiatrists See High Unmet Need
Table 4: Latuda Swot Analysis
Table 5: Dainippon Sumitomo-Key Pipeline Candidates- Japan
Table 6: Dainippon Sumitomo-Key Pipeline Candidates- Us
Table 7: Deals Done By Dainippon In 2013-2014
Chart 1: Atypical antipsychotics market

Eisai - Success in R&D is the Only Hope!
LENVATINIB
Thyroid cancer
Hepatocellular carcinoma
Lung Cancer
Table 1: Sales outlook for major lung cancer drugs vs. Lenvatinib expectation
Halaven - Eisai's Flagship Product After Aricept and Aciphex
Table 2: Indications Prospects For Halaven
Fycompa tmaintain presences intCNS space
E2006 is another candidate strengthening base of CNS franchise
Annexure 1; EISAI R&D Pipeline (Ph II and III Only)

Kyowa HakkKirin - PoteligeCombination Trial With ITherapy Will Drive The Story
KHK's Potelligent technology
Biosimilar JV

Our view on its global late stage pipeline candidates
KW-0761
KW-6002
KRN-23
MEDI-563/Benralizumab/KHK4563
Archimedes acquisition Strengthen Prostakan Product portfoli+ EU presence
Newly launched products in Domestic Market (Japan) Poteligeo, Nouriast, Onglyza - Very slow
uptake does not allow KHK twithstand pricing pressure /biosimilar competition in domestic
market - G-Lasta may change the picture
Table 1: Competitive Landscape Of Biologics In Severe Asthma
Table 2: Parkinson's disease competitive landscape of recently launched PD Drugs in Japan
Table 3: Global Pipeline And Our Comments
Table 4: Deals Done By Khk In 2013-2014
Table 5: Potelligent Technology

Meiji Seika- : Strengthening CNS Foothold & Gx Fusion Strategy tDrive Growth
The core focus on antidepressant market is going tstrengthen further:
Medreich Acquisition - a bold step tventure intoverseas markets
Success in Generic business likely tcontinue
Table 1: Pharma contribution on sales
Table 2: High Profitability of Pharma Segment
Table 3: R & D pipeline
Table 4: Meiji Seika overseas R & D activity

Mitsubishi Tanabe - Overseas Efforts tbe intensified in Coming Years!
Growth drivers vs. long listed exposure
Our view on MT's acquisition strategy
Remicade: biosimilars are unlikely tgenerate massive loss in near term
Invokana- tplay important role in Japan SGLT-2 inhibitor market
Invokana US prescription vs. newly launched products in type 2 diabetes space
Gilenya: Gilenya sales well on track, nimpact of negative data from PPMS
Our view on Gilenya growth going forward & upcoming competition
Key reasons why Gilenya will continue tMaintain its market share in the new competitive landscape
Venture intVaccine Business tunfold soon
Table 1:Clinical data comparison of CT-P13 (Celtrion/NK Remicade biosimilar) vs. INX. In RA (54 week, PLANETRA study) in EU study
Table 2: Top Ten Most Expensive Drugs Procured By Tokyo
Medical Hospital
Table 3: SGLT -2 Inhibitors And Dppiv Players In Japan

Shionogi - Tivicay + Triumeq- Cushion for Shionogi's Next Batch of Innovation!
Tivicay- Tivicay (Dolutegravir) best in class profile has already set the stage for Triumeq use in first line setting, and helps Triumeq ttake the market share from Atripla/ Stribild, Post 2018, FDC with Truvada is a free call option
Pipeline HIV drugs competing with Triumeq- Nnear term threat- TAF- Stribild has its own disadvantage
Shionogi- Late stage pipeline analysis of the global candidates (Table 5)
S-297995
S-888711 (Lusutrombopag)
Shionogi- Early stage pipeline analysis
S-222611
S-010887
Shionogi- Japan- late stage pipeline analysis (Table 7)
S-556971
S-877489 9
Chart 1: Tivicay Prescription Trend vs. Isentress VS. Stribild
Chart 2: TIVICAY VS. ISENTRESS VS. STRIBILD- MARKET SHARE
Chart 3: Current HIV treatment paradigm
Table 1: Single Trial Data- Triumeq vs. Atripla
Table 2: Dolutegravir - Phiii Trials
Table 3: Treatment Of Thrombocytopenia - Recently Approved Drugs + Late Stage Pipeline
Table 4: Global Clinical Data Comparison Of Late Stage Oral TpMimetics For Treatment OF Thrombocytopenia Associated With Chronic Liver Disease
Table 5: Shionogi- Late Stage Pipeline Analysis Of Global Candidates
Table 6: Shionogi- Early Stage Pipeline Analysis - Out Licensing Opportunities
Table 7: Shionogi- Early Stage Pipeline Analysis - Out Licensing Opportunities
Table 8: Deals Done By Shionogi In 2013-2014

SymbiPharmaceuticals: All Eyes Are On Label Expansion Of Treakisym
Rigosertib - Catering Niche despite Negative ONTIME data- Ph II data read out by
YE2014/1H2015 will decide First line potential
In 2nd-line Higher Risk MDS patients (IV Rigosertib)
In 1st line lower risk MDS pts (Oral Rigosertib)
TREAKISYM
CLL
Front line NHL
RR aggressive NHL
Upcoming Milestones
Chart 1: Symbio- Pipeline
Table 1: RR/2nd line HR MDS- Select late-tmid stage pipeline

Takeda -Will the New Launches (Entyvio, Takecab, and Brintellix) Set The Stage For Next Growth Cycle???
Key milestones twatch for in 2015 are
EU portfolibecoming strong post ENTYVIand Natura alpha launch - Nycomed's strong GI market presence will boost this franchise
Entyvi(Vedolizumab/MLN0002, approved US/EU, vedolizumab, ?4?7 integrin inhibitor, Ulcerative colitis / Crohn's disease): Strong uptake confirms differentiated profile- blockbuster potential likely
Competition from Pipeline drugs:
Brintellix (Vortioxetine) - Cognition data will differentiate Brintellix in genericized depression market-
Vortioxetine vs. Currently Available Drugs
MLN-9708 (PhIII, Multiple Myeloma) interim PhIII data in RRMM in combination with Revlimid in 2015 will decide its potential in crowded Multiple Myeloma market:
Expected competition tVelcade in Second/third line setting and upcoming milestones before patent expiry (2017)
Table 1: Deals Done By Takeda In 2013-2014
Table 2: Key Late Stage Pipeline Global Candidates- Takeda
Table 3: Pipeline Leukocyte Traffic Inhibitor (Integrin Inhibitor)
Chart 1: Mln9708 -Trial Design Of Tourmaline-Mm1 - Rrmm
Table 4: competitive landscape -mln 0002/vedolizumab vs. marketed mab in ulcerative colitis
Table 5: Takeda Competitive Landscape mln 0002/vedolizumab vs. marketed mab in crohn's disease
Table 6: Takeda Mln 0002/Vedolizumab Clinical Trial Program
Table 7: Vortioxetine - Major Depressive Disorder
Table 8: Vortioxetine - Major Depressive Disorder - Drugs Discontinued In The Recent Past
Table 9: Vortioxetine - Major Depressive Disorder - Competitive Landscape
Table 10: Data Comparison - Newly Diagnosed Multiple Myeloma (Ndmm)
Chart 2: MLN-9708 Trial design
Chart 3: Reported adverse events in clinical trials- MLN9708
Table 11: Data Comparison - Relapsed And Refractory Multiple Myeloma (Rrmm)
Table 12: Data Comparison - Relapsed And Refractory Multiple Myeloma (Rrmm) -

Japan Generics:

Nippon Chemiphar - Less Vulnerability tNew Pricing System is Advantageous!
Relatively Modest Margins Profile Compared tPeers
Impact of April 14 NHI price revision
A balanced portfoliprovides flexibility in adopting favorable market strategies:
Table 1: Nippon Chemiphar Sales break up
Annexure 1- Key Features of New NHI Pricing System

Sawai - Poised Well TSail Through Tough Times!
Gradually improving wholesaler base is advantageous
Table 1: Gradually Improving Wholesaler Base
Primary Care Focused Product Mix- Not Highly Profitable yet less Risky
Table 2: Balanced Primary Care Products-Mix
Table 3: Better Performance by New products
Table 4: Value To/Of Products Going Off Patent In Next 5 Years
Table 5: Newly Listed Products In 2014
Figure 1: Sawai- Medium tlong term vision

Towa - Tough Time In Adapting TNew Pricing Regulations!
Need of decreasing dependence on direct sales channel under changed scenarios:
A solid foundation of organic growth is in place through years of constant Capex and R&D investments
GP Market Focus is Moving tDP Markets; HP Needs Improvement
Japan Generic Industry Outlook
Table 1: Direct Sales On Rise
Chart 1: Constantly Increasing Capex
Table 2: Key Launches Of 2014
Table 3: Steady Performance Of Key Products
Table 4: GP Market Focus Switching TDP Market

List of Tables

Astellas : Table 2: Pipeline Early stage Androgen Receptor antagonist
Table 3: Competitive landscape for Antifungals
Table 4: Competitive landscapes for OAB drugs
Table 5: Pipeline HIF alpha stabilizer- AKEBIA AKB-6548 is closest competitor
Table 6: Competitive landscape- Anti PCSK9 MAB- ALIROCUMAB vs. EVOLOCUMAB
Chugai: Table 1: Deals Done By Chugai Pharma in 2013-2014
Table 2: Ongoing Important Clinical Studies of Kadcyla in Late Stage Her 2 Positive Cancers
Table 3: Actemra - Ongoing Global Trials
Daiichi Sanky: Table 1: Edoxaban - Possible ScenariAnalysis and Peak Sales Estimate
Table 2: % Patients Crcl Table 3: Launched Noac- Efficacy And Safety Comparision - In Renally Imparied Patients
Table 4: Launched Noac- Ww Reported Sales
Table 5: Competitive Landscape - Select Late And Mid Stage Drug Targeting Aml
Table 6: Select Jak 2/1 Inhibitors: Mid- TLate-Stage Pipeline
Annexure 1: 5-Year Business Plan: Numerical Targets For Fy2017
Annexure 2: Core Strategies Of 5-Year Business Plan
Annexure-3: New Generation Oral Anticoagulants - Market Dynamics
Dainippon Sumitom: Table 1: Pipeline Of Drugs Targeting Cancer Stem Cell
Table 2: Pipeline Of Boston Biomedical
Table 3: Psychiatrists See High Unmet Need
Table 4: Latuda Swot Analysis
Table 5: Dainippon Sumitomo-Key Pipeline Candidates- Japan
Table 6: Dainippon Sumitomo-Key Pipeline Candidates- Us
Table 7: Deals Done By Dainippon In 2013-2014
Eaisai: Table 1: Sales outlook for major lung cancer drugs vs. Lenvatinib expectation
Table 2: Indications Prospects For Halaven
Annexure 1; EISAI R&D Pipeline (Ph II and III Only)
Kyowa HakkKirin : Table 1: Competitive Landscape Of Biologics In Severe Asthma
Table 2: Parkinson's disease competitive landscape of recently launched PD Drugs in Japan
Table 3: Global Pipeline And Our Comments
Table 4: Deals Done By Khk In 2013-2014
Table 5: Potelligent Technology
~Meiji Seika : Table 1: Pharma contribution on sales
Table 2: High Profitability of Pharma Segment
Table 3: R & D pipeline
Table 4: Meiji Seika overseas R & D activity
Mitsubishi Tanabe : Table 1:Clinical data comparison of CT-P13 (Celtrion/NK Remicade biosimilar) vs. INX. In RA (54 week, PLANETRA study) in EU study
Table 2: Top Ten Most Expensive Drugs Procured By Tokyo
Medical Hospital
Table 3: SGLT -2 Inhibitors And Dppiv Players In Japan
Shionogi: Table 1: Single Trial Data- Triumeq vs. Atripla
Table 2: Dolutegravir - Phiii Trials
Table 3: Treatment Of Thrombocytopenia - Recently Approved Drugs + Late Stage Pipeline
Table 4: Global Clinical Data Comparison Of Late Stage Oral TpMimetics For Treatment OF Thrombocytopenia Associated With Chronic Liver Disease
Table 5: Shionogi- Late Stage Pipeline Analysis Of Global Candidates
Table 6: Shionogi- Early Stage Pipeline Analysis - Out Licensing Opportunities
Table 7: Shionogi- Early Stage Pipeline Analysis - Out Licensing Opportunities
Table 8: Deals Done By Shionogi In 2013-2014
SymBiPharma : Table 1: RR/2nd line HR MDS- Select late-tmid stag e pipeline
Takeda : Table 2: Key Late Stage Pipeline Global Candidates- Takeda
Table 3: Pipeline Leukocyte Traffic Inhibitor (Integrin Inhibitor)
Chart 1: Mln9708 -Trial Design Of Tourmaline-Mm1 - Rrmm
Table 4: competitive landscape -mln 0002/vedolizumab vs. marketed mab in ulcerative colitis
Table 5: Takeda Competitive Landscape mln 0002/vedolizumab vs. marketed mab in crohn's disease
Table 6: Takeda Mln 0002/Vedolizumab Clinical Trial Program
Table 7: Vortioxetine - Major Depressive Disorder
Table 8: Vortioxetine - Major Depressive Disorder - Drugs Discontinued In The Recent Past
Table 9: Vortioxetine - Major Depressive Disorder - Competitive Landscape
Table 10: Data Comparison - Newly Diagnosed Multiple Myeloma (Ndmm)
Chart 2: MLN-9708 Trial design
Chart 3: Reported adverse events in clinical trials- MLN9708
Table 11: Data Comparison - Relapsed And Refractory Multiple Myeloma (Rrmm)
Table 12: Data Comparison - Relapsed And Refractory Multiple Myeloma (Rrmm) -
Nippon chemiphar : Table 1: Nippon Chemiphar Sales break up
Annexure 1- Key Features of New NHI Pricing System
Sawai : Table 1: Gradually Improving Wholesaler Base

List of Figures

Astellas : Chart: 1, 2 - Current and Future use of anti androgens in treatment of Prostate Cancer Chugai - Alectinib, ACE910 Global Success - Next Growth Driver!
Dainippon Sumitom: Chart 1: Atypical antipsychotics market
Shionogi: Chart 1: Tivicay Prescription Trend vs. Isentress VS. Stribild
Chart 2: TIVICAY VS. ISENTRESS VS. STRIBILD- MARKET SHARE
Chart 3: Current HIV treatment paradigm
SymBi: Chart 1: Symbio- Pipeline
Takeda :Chart 1: Mln9708 -Trial Design Of Tourmaline-Mm1 - Rrmm
Chart 2: MLN-9708 Trial design
Chart 3: Reported adverse events in clinical trials- MLN9708