Cell and gene therapies and regenerative medicines (CGT&RMs) have the potential to prevent and treat some of the most challenging medical conditions. As such, the market for such therapies has grown rapidly in recent years. In 2021 alone, $22.7 billion was invested into the sector, and in the first half of 2021, more than 2,000 CGT&RM clinical trials were in progress.¹

Seeing the potential of CGT&RMs to transform healthcare, many countries have made great efforts to ease their path to market. Among these countries, Japan has emerged as a go-to region for pharmaceutical and biotechnology companies looking to start or grow their CGT&RM portfolio.

In this article, we explore what makes Japan an ideal location for CGT&RM product development, including how the region is well-equipped to expedite the commercialization of these novel therapies. We also highlight the potential challenges that foreign companies may face when progressing their product development in Japan, as well as the key role Japanese-based contract development and manufacturing organizations (CDMOs) play in helping companies navigate these challenges and unlock the region’s full CGT&RM program-enhancing potential.

Japan: a landscape of opportunity for CGT&RMs

Japan has long been synonymous with innovation and progress, and this is certainly true when it comes to the CGT&RM space. After all, Japan is the birthplace of induced pluripotent stem cells (iPSCs), a foundational technology which catapulted the CGT&RM space forward.

Today, a unique blend of several features and capabilities makes Japan an attractive location for CGT&RM development, manufacture, and commercialization.

An aging population with growing demand for CGT&RM products

Perhaps one of the most important features of Japan for CGT&RM developers is its rapidly aging population. In 2020, approximately 29% of the population was aged 65 or over,² making Japan home to one of the oldest populations in the world. And a combination of robust, advanced healthcare and low fertility rates means that this trend is likely to continue, with estimates suggesting elderly citizens will account for approximately 35% of the Japanese population by 2040—equating to roughly 39 million people).²

A rapidly aging population poses several challenges for a country, not least of which is a greater burden on healthcare infrastructure; with age comes an increased risk of many conditions that are resistant to traditional therapeutic approaches, from certain cancers to a range of degenerative diseases. As a result, Japan is in urgent need of novel therapies that can effectively address such conditions—therapies such as CGT&RMs. Accordingly, Japan’s population presents a significant opportunity for CGT&RM developers: the need for innovative therapies is already high and will likely only continue to grow.

CGT&RM-supporting regulations

As well as boasting an attractive patient population, Japan offers a unique regulatory landscape that can expedite the commercialization of promising CGT&RMs.

In 2014, a series of regulatory reforms reshaped Japan’s regulatory environment to better support and enable CGT&RM development. Most notably, Japan introduced the Pharmaceutical and Medical Devices (PMD) act, an update to the county’s 1960 Pharmaceutical Affairs Law. The result was an expedited approval route for CGT&RMs that allows developers to get promising therapies to market much sooner (see Figure 1).


Through the conditional, time-limited approval pathway, developers can bring their products to market if they successfully demonstrate safety and presumable clinical benefit in early clinical trials. Developers seeking full approval then have up to seven years to confirm the clinical benefit through post-marketing surveys. Since its inception, the conditional, time-limited approval pathway has already seen four CGT&RMs successfully commercialized, demonstrating the regulation’s utility in getting novel CGT&RMs to patients in need.

Japan also introduced the Sakigake Designation System with a similar aim—to support and streamline the development of innovative medicines, including CGT&RMs, that target serious, unaddressed medical conditions.

The system offers several benefits to CGT&RM companies, including:

•  shorter lead times for consultations with Japan’s regulatory agencies;
•  prioritized and shortened New Drug Application (NDA) reviews;
•  extended re-examination periods; and
•  potential 10–20% premium pricing increase.

Beyond these enabling regulations, and unlike many other Asia-Pacific (APAC) countries, Japan has also aligned its regulations with those of other major geographies, such as the U.S. and Europe, helping to support smoother product development for foreign CGT&RM developers. Japan’s regulators, for example, helped establish the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH), in collaboration with the U.S. FDA and the EMA. Japan’s regulatory agencies also participate in the Pharmaceutical Inspection Co-operation Scheme (PIC/S) for harmonized Good Manufacturing Practice (GMP) requirements, alongside the U.S. FDA and many regulatory agencies across Europe and the rest of the world. Critically, Japan continues to work for even greater regulatory alignment through regular and close correspondence with the U.S. FDA and the EMA, too.

A healthy, high-growth market

Given the above, it’s not hard to see why Japan’s CGT&RM market is already large and growing at a rapid pace—another significant attraction for foreign CGT&RM companies. A recent report estimated the country’s CGT&RM sector to be approximately ¥25 billion (~$185.5 million, as of publication date) in 2022.³ By 2030, the sector is expected to reach ¥850 billion (~$6.3 billion), growing further to ¥1.1 trillion (~$8.2 billion) by 2040.³ This is great news for pharmaceutical and biotechnology companies looking to grow their CGT&RM portfolios; with such a high-growth market, developers have the potential to capture significant market share and generate healthy, sustained revenues.

Japan has also approved a significant number of CGT&RMs already—19 as of March 2023—demonstrating the feasibility of CGT&RM commercialization in Japan. These approvals began with the tissue engineered product JACE back in 2007, and now span a plethora of CGT&RM modalities treating a diverse mix of conditions, from certain cancers to spinal muscular dystrophy and heart failure.

JACE: the beginning of Japan’s CGT&RM product journey

In 2007, Japan approved its first CGT&RM therapy, JACE, an autologous cultured epidermis product developed by Japan Tissue Engineering Co., Ltd. (J-TEC)⁴ for the treatment of scars, nevi, ulcers, severe burns, and other skin conditions (see Figure 2).


At the time JACE was developed, Japan had no standardized regulation for regenerative medicine, and so the product was approved as a medical device. However, the approval of JACE, followed by Dr. Yamanaka’s Nobel Prize in Physiology in 2012 for his work on iPSCs, triggered a significant regulatory change—the introduction of the 2014 PMD act (see “CGT&RM-supporting regulations” above), which led to a distinct regenerative medicine products category.

Moreover, the approval of JACE drove a trend in the development and approval of tissue engineered (TE) products in Japan, with five new TE therapies having been approved since JACE. Similarly, there has been significant growth in the development of cell and gene therapy products, such as CAR-T—with the launch of five CAR-T products in Japan to date.

A virtuous healthcare-industry-academia partnership

Global markets, including Japan, are invested in a self-reinforcing collaborative cycle between stakeholders that accelerates innovation and CGT&RM product refinement. The healthcare-industry-academia cycle, shown in Figure 3, demonstrates how these individual parties collaborate and share knowledge for more effective treatment development.


Most notably, the doctors that use CGT&RM products are heavily involved in the development process, providing unique insights and perspectives into these treatments. Japan, with its network of deeply cooperative doctors that understand the potential of CGT&RMs, is well-equipped to support these markets and ultimately help unlock better treatments for patients.

Japan’s unique regulatory landscape demands careful consideration

Despite the significant potential that Japan offers, developing CGT&RMs in the region is not without its potential challenges. Most importantly, foreign pharmaceutical and biotechnology companies must contend with several unique regulations that have the potential to significantly delay program progress and drastically increase costs if attempting to navigate without regional expertise. Two regulations in particular demand careful consideration:

1. The Standards for Biological Ingredients
The Standards for Biological Ingredients (SBI) aims to ensure that products manufactured using biologically derived materials have the required quality, safety, and efficacy. Accordingly, the standard demands that developers meet a host of exacting requirements, including confirming the eligibility of raw material donors, testing raw materials to ensure they are free of contaminants, and mitigating a variety of risks throughout the manufacturing process. While regulations to ensure the quality, safety, and efficacy of therapies using biologically derived materials are not unique to Japan, the SBI demands developers prove they meet these requirements ahead of clinical trials, which is not often the case in many countries.

Being unaware of SBI requirements, and when you need to demonstrate adherence to them, can have costly and spiraling consequences. For instance, if materials aren’t aligned to SBI requirements, companies may need to use different materials for commercial products, which may demand a different manufacturing approach or even an additional clinical trial.

2. Contending with the Cartagena Act
The Cartagena Act (CA) is another regulation that could pose difficulties for companies unfamiliar with Japan’s CGT&RM development landscape. Broadly, the CA aims to assess and control the impact of genetically modified organisms (GMOs), including viral-based vectors, such as AAVs, on biological diversity. Under the CA, companies who use GMOs either in their product or during its manufacture must conduct an environmental risk assessment (ERA). Again, an ERA is not a requirement unique to Japan. What is unique, however, is that companies developing CGT&RMs in Japan must submit their ERA—and have it approved—ahead of clinical trial initiation.

Moreover, completing an ERA that meets CA requirements is complex: large volumes of data are needed, and the requirements may not always be clear, necessitating frequent and continued communication with Japan’s regulatory authorities. This, combined with the fact that an ERA review can be equally time-consuming and complex, means that the CA can be a serious regulatory bottleneck for under-prepared and ill-informed CGT&RM developers.

Japanese CDMOs: navigate challenges, unlock Japan’s full CGT&RM potential

While Japan is suitably equipped to enable CGT&RM program efficiency and success, capitalizing on its benefits, effectively navigating its regulatory idiosyncrasies, and simultaneously overcoming the inherent complexity of CGT&RM development can be difficult for those without deep experience.

In the face of such challenges, Japanese-based CDMOs have emerged as a key strategic partner. For smaller pharmaceutical and biotechnology companies with limited in-house capabilities and poor knowledge of Japan’s biopharmaceutical landscape, CDMO partnerships may offer the only viable solution for CGT&RM development, manufacture, and commercialization.

Setting up for success: key CDMO capabilities

That said, Japanese CDMOs come in a variety of forms, with varying capabilities, areas of expertise, and levels of experience. It is therefore critical that companies thoroughly evaluate options before coming to a decision on their chosen CDMO. Below, we summarize several critical capabilities that can make the difference between CGT&RM program success and failure.

1. Prioritize regulatory expertise
As already discussed, Japan’s regulatory environment, while structured to accelerate the delivery of CGT&RMs to market, may pose potential challenges for those unfamiliar with it. When faced with unique regulatory considerations in a new geography, it is imperative that CGT&RM companies seek deep regulatory expertise as early as possible. Doing so will enable them to grasp more quickly what is expected of them from a regulatory standpoint, without the need to invest significant resources and time in finding and interpreting complex information themselves. Armed with early insights into exactly what is needed, companies can better plan their development program, reduce risks, and more confidently overcome possible roadblocks.

Seeking trusted regulatory expertise should also be complemented by early and frequent engagement with regulatory agencies. The PDMA in Japan is very transparent and open to consultation with developers, and companies should take full advantage of this in the earliest stages of product development. Such an approach will give regulators a clearer understanding of the product in question, which means developers gain clarity on what is expected in terms of data submission. Early engagement can also help shine light on any applicable privileges, such as grants, meaning companies can avoid unnecessary costs.

With this in mind, CGT&RM developers should ensure that their Japanese-based CDMO partner has both deep regulatory know-how and direct, established lines of communication with regulatory agencies to facilitate consultation. Given the importance of such capabilities, companies may be surprised to find out that, while many CDMOs can offer CGT&RM development and manufacturing support, far fewer CDMOs can offer the regulatory skills and network to realize important opportunities and fast-track a medicine’s route-to-market.

2. Choose a CDMO with extensive CGT&RM-specific manufacturing experience and technologies
Manufacturing safe and effective CGT&RMs for clinical trials and commercial use is more challenging than with traditional therapeutic modalities, primarily due to the use of inherently variable and sensitive biologically derived raw materials and living cells. Living cells, for example, are extremely sensitive to small changes in environmental factors such as CO₂ levels and temperature, with the degree of sensitivity varying dramatically by cell type. In this context, creating scalable, and compliant manufacturing processes is difficult without the right process development experience and technologies spanning a wide range of raw materials and cell types.

Choosing a CDMO that doesn’t provide such capabilities could mean a rockier and more costly route to scaled, regulatory-compliant manufacturing processes.

Companies also face difficulties even once manufacturing is scaled for commercial production. To ensure stable product supply, for instance, manufacturers must ensure they can effectively minimize the risk of out-of-specification (OOS) products, which is inherently more difficult for cell and tissue-based therapies. Choosing a CDMO that boasts the necessary skills and experience for continuous improvement of manufacturing methods and specifications, as well as the ability to rapidly identify and correct the cause of any OOS results, is therefore paramount.

3. Proven collaborative relationships with logistics providers
Japan is well known for its advanced transportation and logistics infrastructure. However, just having logistics infrastructure to hand does little to ensure that your CGT&RM products can be transported rapidly to the point of care, under the exacting environmental conditions that they often demand. For this, logistics providers need to be effectively managed and communicated with.

Accordingly, to minimize any risks to the quality and efficacy of CGT&RMs during transport, pharmaceutical and biotechnology companies should prioritize working with CDMOs that know how to effectively collaborate with logistics partners, foresee issues, and rapidly generate solutions.

4. A proven track record
Finally, companies seeking a success enabling CDMO partner should find service providers that have already demonstrated their ability to deliver CGT&RMs to market, ideally more than once and across a range of therapeutic modalities.

An extensive track record of CGT&RM program success means that a CDMO will have built up an in-depth understanding of requirements at each stage of the development, manufacturing, and commercialization journey, as well as boast a suitable arsenal of technologies and talent to realize success. What’s more, it will mean that the CDMO can better anticipate bottlenecks, identify, and capitalize on opportunities, and unlock greater efficiencies from program start to finish.

Japan: starting your journey to CGT&RM success

As the world races to realize the transformative potential of CGT&RMs, pharmaceutical and biotechnology companies are seeking out the most promising locations to expand their CGT&RM portfolios and better serve patients. Japan has emerged as an ideal location for this endeavor, not least because of its technological know-how, attractive patient population, and a regulatory landscape tailored to the success of safe and effective CGT&RM products. But Japan’s unique regulations can also be a potential challenge for those without the right knowledge and guidance.

To make the most of Japan’s CGT&RM opportunity while sidestepping these potential regulatory stumbling blocks, companies should partner with an appropriately equipped and deeply experienced CDMO partner—one that has the regulatory insight, manufacturing and logistics know-how, and demonstrable track record to secure a successful product launch.

References
1. https://alliancerm.org/sector-report/h1-2022-report/
2. https://www.jetro.go.jp/ext_images/en/invest/img/attractive_sectors/life_science/life_en_202202.pdf?)
3. https://www.amed.go.jp/content/000062056.pdf
4. https://www.jpte.co.jp/en/introduction/index.html

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Takayuki Nakano holds a PhD from Osaka University, Japan, and is a pharmaceutical business executive with more than 20 years’ experience in global R&D, business strategy planning, and organizational management. His extensive experience at a large pharmaceutical company saw him work with diverse offices worldwide, with a focus on building business and developing products for diabetes and vaccine programs. He joined Teijin in 2021 to build its Regenerative Medicine business, including Teijin’s CDMO offering, through an acquisition of Japan Tissue Engineering Co., Ltd. He also works within the Implantable Medical Device business, which develops, manufactures, and distributes medical devices such as artificial joints, trauma devices, spinal devices, and bioresorbable materials for orthopedic, maxillofacial, and other types of surgery.