Takara Bio Group’s Mid-term Management Plan

Takara Bio Inc. announced a three-year, medium-term management plan covering April 1st, 2014 to March 31st, 2017. The company’s goal is to achieve sales of ¥28 billion and an operating income of ¥2.25 billion by fiscal year 2017, absorbing an increase in research and development expenses. The Company aims to reach new heights for sales, operating income, and net income each fiscal year from FY2015 to FY2017.

 

Based on the Company’s mission – Contributing to the health of humankind through the development of revolutionary biotechnologies such as gene therapy – the Takara Bio Group will focus on three business segments that utilize the group’s core biotechnology: the Bioindustry Business, the basis for stable earnings; the AgriBio Business, the segment being nurtured as the Company’s secondary profit-making business; and the Gene Therapy Business, the segment that the Company views as the foundation for future growth.

 

In the Bioindustry Business, Takara Bio plans to expand the CDMO (Contract Development and Manufacturing Organization) business to support the development of bio-pharmaceuticals in the Center for Gene and Cell Processing, a new facility scheduled to begin full-scale operation in October 2014.

 

In the AgriBio Business, Mizuho Norin Co., Ltd. (subsidiary) is shifting focus to production of higher-value Honshimeji mushrooms rather than Hatakeshimeji mushrooms; Takara Bio aims to make this business segment profitable in FY2016 by managing stable production and expanding sales routes.

 

In the Gene Therapy Business, Takara Bio plans to continue advancing gene therapy projects with the aim of conducting a Phase II clinical trial in the United Statesand commencing a Phase I clinical trial in Japan this fiscal year for HF10 anti-cancer therapy.

* These segments are based on the new business segments resulting from corporate reorganization effective April 1, 2014.

As a result of corporate reorganization on April 1, 2014, Takara Bio operates three business segments, Bioindustry, Gene Therapy, and AgriBio. This new organization allows for full use of the Company’s technological expertise and is intended to boost profitability. In the reorganization, the CDMO business was integrated into the Genetic Engineering Research Business, and the new entity was rebranded as the Bioindustry Business, considering the Act on the Safety of Regenerative Medicine that enables outsourcing of cell processing. The Gene Medicine Business was renamed Gene Therapy Business. A Project Management Department was created in the Gene Therapy Business segment to promote the Company’s gene therapy projects. In this new organization, the Company will adopt the following business strategies with the aim of building a foundation for future growth.

 

(1) Bioindustry Business

This business is the Takara Bio Group’s core business segment for generating stable revenue.
The Company distributes research reagents and scientific instruments globally for biotechnology researchers at universities and companies, and also provides contract research services. The Company will accelerate the development of new products to support growing fields, such as basic research utilizing induced pluripotent stem (iPS) cells and regenerative medicine and cell therapy research.
Takara Bio aims to expand its CDMO business by providing contracted services including GMP (Good Manufacturing Practice) production of biopharmaceuticals, and serving as a contracted partner for R&D. This will involve leveraging the technologies and expertise developed over the years in gene therapy and clinical development to provide a number of services. These services will include the development of production processes and quality-control and testing methods, trial production, bioassays, and GMP production services such as vectors for gene therapy and cells used in regenerative medicine and cell therapy. The Center for Gene and Cell Processing in Kusatsu city, Shiga prefecture, is a new facility (under construction) built in compliance with GMP guidelines that will serve as the core facility for producing Takara Bio products related to its gene therapy projects and for the CDMO business. The facilities in Otsu city, Shiga prefecture, Kusatsu city, Shiga prefecture, and Yokkaichi city, Mie prefecture will be integrated with and moved to a new facility in Kusatsu city, Shiga prefecture by July, 2015. This integration will make research and development more effective and improve the quality of the Company’s contract services.
The Company will expand from supporting basic research to supporting drug-discovery and industry while actively advancing the business as follows:

 

• Expanding the CDMO business concentrated in the Center for Gene and Cell Processing, including commencement of contracted cell processing services and GMP-grade vector production services
• Developing and increasing sales of new products for use in the fields of regenerative medicine, cell therapy utilizing iPS cells, etc.
• Developing next-generation sequencing-related technologies to grow contract services business, focusing on whole human genome sequence analysis and miRNA analysis
• Enhancing product development capabilities by establishing different development focuses that utilize the strengths of the Company’s three research and development bases in Japan, the United States, and China
• Improving marketing and sales systems by focusing on, for example, sales promotions aimed at key accounts, E-marketing improvements, and new brand strategies
• Building an efficient production framework by enhancing coordination among production facilities in Japan, China, and India

 

(2) Gene Therapy Business

In this business, Takara Bio continues to advance its gene therapy projects with the aim of early commercialization of HF10 anti-cancer therapy, MAGE-A4 antigen-specific TCR gene therapy, and MazF gene therapy. In addition, the Company is considering adoption of early approval system for drugs that will be applicable to medicinal regenerative products in the Amendment of Pharmaceuticals Affairs.

On April 30, 2014, Takara Bio submitted an Investigational New Drug application to the Food and Drug Administration (FDA) for Phase II clinical trial of an HF10 anti-cancer therapy targeting malignant melanoma, and patients will be recruited after institutional approval. Preparations are being made to begin Phase I clinical trial in FY2015 in Japan.
Takara Bio suspended the HSV-TK gene therapy project aimed at initiating a joint clinical trial in Japan and South Korea due to the following circumstances:

 

• Clinical development projects with higher priority, including the HF10 anti-cancer therapy and TCR gene therapy projects, moved to the next phase
• The operational policy of HLA mismatched hematopoietic stem cell transplantation in Japan is changing, and the Company’s project plan needs to be reconsidered accordingly
• MolMed S.p.A, of Italy, filed an application for Conditional Marketing Authorisation with the European Medicines Agency (announced in March, 2014), and Takara Bio’s project plan can be made more effective after evaluation of the application’s review

 

(Plan for Gene Therapy Projects)

 

• Conduct clinical development of HF10 anti-cancer therapy for solid tumors in the United States
  (Objectives: commence Phase II clinical trial in the United States in the first half of FY2015, initiate clinical trial in Japan in FY2015, and bring product to market in the United States by FY2019)
• Conduct clinical development of MAGE-A4 antigen-specific TCR gene therapy for esophageal cancer
  (Objective: bring product to market in FY2022)
• Conduct clinical development of MazF gene therapy for HIV in the United States
  (Objective: bring product to market in FY2023)
• Conduct clinical development of NY-ESO-1 antigen-specific TCR gene therapy for solid tumors
  (Objective: begin clinical trial in FY2015)

 

(3) AgriBio business

Takara Bio operates a functional food business mainly focusing on the development of functional food ingredients and a mushroom business. The Company’s mushroom business (Mizuho Norin Co., Ltd.) is shifting focus from Hatakeshimeji mushrooms to higher-value Honshimeji mushrooms, in addition to building a stable production framework and expanding sales channels. The Company’s functional food business aims to increase sales of functional food products through collaboration with Takara Healthcare Inc. FY2016 is the target year for achieving profitability for the AgriBio Business as a whole.

 

• Conduct in-house R&D and collaborate with medical research institutes with the aim of acquiring evidence-based data on functional food ingredients, including “Fucoidan” from Gagome Kombu (Kelp), “Isosamidin” from Herb (Peucedanum japonicum), “Chalcone” from Ashitaba (Angelica Herb), “Agaro-oligosaccharide” from Agar, “YamsgeninTM” from Yam (Dioscorea esculenta), and “Terpene” from Mushroom.
• Publish acquired evidence-based data and distribute information booklets to improve awareness
• Enhance quality-control and quality-assurance systems to provide safe and reliable products
• Reduce production costs by reviewing production methods and raw material procurement methods
• Ramp up production of Honshimeji at Mizuho Norin and increase sales via sales channel expansion
• Expand licensing business for mushroom cultivation technologies and expertise