Earlier in 2020, Chugai overtook Takeda to become Japan’s largest pharma company by market value, having surpassed Daiichi Sankyo back in 2019. Bloomberg analysts attribute the company’s impressive growth in recent years primarily to its own hemlibra treatment for haemophilia.

 

However, the COVID-19 pandemic and the subsequent rush to find safe and effective treatments have given Chugai a further shot in the arm. Actemra, an immune suppressor developed by Roche – which has held a 60 percent stake in Chugai since 2002 – has potential as a treatment for critically ill COVID-19 patients, despite being typically utilised to treat arthritis and Chugai began enrolling patients for a large-scale Phase III clinical trial in Japan on May 25. There is also the possibility that other Roche cancer drugs Tecentriq and Avastin could be used as part of a combination therapy for COVID-19.

 

Takashi Akabane, an analyst at Tokai Tokyo Securities, told Bloomberg that “With all the good news about its cancer treatments and coronavirus drugs, Chugai gives off a sense of security… Developments in its cancer treatment could be a large contributor to earnings, which would buoy its stock price.”

 

Chugai was formed in 1925 and developed independently until 2002 when it struck a strategic alliance with Swiss Big Pharma Roche quite unique within the somewhat closed shop of Japanese pharma. As the company’s website explains, “Chugai maintains its management independence under its strategic alliance with Roche, one of the world’s leading pharmaceutical companies. In addition to efficiently in-licensing the Roche Group’s pharmaceuticals for sale in Japan, we use the Roche Group’s powerful research infrastructure and its global development and sales platform to offer significant value to the rest of the world.”

 

Back in 2017, when PharmaBoardroom spoke to Chugai honorary chairman Osamu Nagayama, then chairman and CEO of the company and the man who helped strike the Roche deal, he explained how the partnership was unique within Japan and helped put Chugai on the path to success. “My company did something extraordinary in allowing Roche to gain a controlling share in 2002,” he proclaimed.

 

“Our actions surprised the industry and government. There was no precedent and remains no precedent. Roche acquired the majority of our shareholding, but we remained a publicly listed company with full autonomy. At the beginning, people thought it was a crazy idea but, 15 years later, we have probably been the most successful Japanese company in terms of creating breakthrough therapies. Roche is number one worldwide in terms of breakthrough therapies granted by the FDA with 17, five of which are from Chugai’s research.”

 

Nagayama continued, “At the time, Chugai’s size meant that we could not afford to capitalize on all of the opportunities present in biologics. Even Roche has found that it cannot afford to do everything. Roche, Genentech and Chugai are now doing research with autonomy. This allows us to secure diversity for creating innovation as well as establish robust research infrastructures for rapidly advancing technologies through mutual use of research resources and information exchanges. As a result, this autonomous system can maximize research efficiency of the group totally.”

 

He was not, however, optimistic, that others in the Japanese industry would follow Chugai’s lead and embrace this kind of partnership model. “The media has predicted that several companies will follow the example set by Chugai and Roche, but so far this has not been the case, perhaps due to cultural issues. There is still an antagonism towards mergers from Japanese companies, both with other Japanese companies and especially with foreign entities.”