Japanese drugmakers--and many others around the world as well--routinely face steep declines in revenues when their products go off patent, or fall off the "patent cliff" as a recent Nikkei report termed it, and these companies are now turning to technology as one way to stave off the decline in cash flow. Still others are renegotiating licensing deals with global partners to keep the cash coming in.
Tokyo-based Otsuka Pharmaceuticals is one example of a company using technology to survive the patent cliff, Nikkei reported. The company and its American partner, Proteus Digital Health, have developed a tiny chip that sits atop its antipsychotic drug Abilify that is used to determine if patients are taking the drug the way doctors intended.
While the actual chemicals in the drug have not changed, the addition of the chip is meant to qualify it as a new drug and Otsuka has applied to the U.S. Food and Drug Administration for new drug recognition, according to the Nikkei report.
The stakes for Otsuka are huge. Global sales of Abilify in 2014 were $4.14 billion, accounting for 40% of the company's group sales at parent Otsuka Holdings, according to the Nikkei report.
Another company, Tokyo-based Teijin Pharma, also used technology to improve its hyperuricemia treatment Feburic, which faces patent expirations between 2018 and 2020. The company developed a "body-absorbent fiber" that is combined with a hemostatic agent to help regenerate tissue for external wounds, Nikkei reported.
Other companies are taking a different route to avoid or mitigate patent expirations. Osaka-based Shionogi for example, negotiated a deal with AstraZeneca ($AZN), which holds the rights to its cholesterol treatment Crestor on sales outside of Japan. The two agreed to cut the royalties on Crestor sales but extend the contract so that Shionogi will receive smaller payments but for a longer period.
- here's the report from Nikkei
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