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Tokuyama brought its first active pharmaceutical ingredients (APIs) to the generic market in 2006. The Company’s business in this segment has been growing since then, with the Company bringing to market eight APIs for drugs treating conditions such as ulcers, diabetes, allergies, and hypertension. The Company is working to further raise added value and secure differentiation in the generic API business.

Ten Years of Experience Manufacturing APIs

Tokuyama began contract manufacturing APIs for customers in 1996 at the Kashima Factory. The Company expanded into the generic API market in 2003, in order to leverage its expertise in organic synthesis and take advantage of a policy shift by the Japanese government in favor of generic drugs.
The Company brought its first generic API to market in 2006 in the form of a glaucoma treatment drug, and currently offers eight APIs centering on cardiovascular and diabetes treatment drugs. These APIs have earned a strong reputation from drug manufacturers, enabling Tokuyama to capture a strong presence in the generic API market, which accounts for more than 60% of the pharmaceuticals market.

Advanced R&D Capabilities Needed for Generic APIs

Generic API manufacturers must develop their own manufacturing processes from the ground up, as expiring manufacturing patents for brand-name drugs do not describe the manufacturing processes. Furthermore, all phases of the manufacturing process, from quality control and manufacturing to regulatory compliance, must meet or exceed the level required for brandname drugs.
Tokuyama filed more than 100 patents in the ten years through 2015, a number that far exceeds that of the typical pharmaceutical company. Drug prices in Japan are set by the government, making it difficult for manufacturers to adjust prices to reflect drug performance and quality. Despite this challenge, Tokuyama is leveraging its strengths in process technology to enhance cost competitiveness.

Generic APIs Brought to Market by Tokuyama

Working Closely with Customers to Meet Their Needs

Tokuyama works closely with customers to advance API development, with sales and development working in concert. Business development is pursued in unison between various departments, such as involving quality assurance personnel in the process development phase to ensure that the quality sought by customers is realized.
The generic API market is expected to become increasingly competitive over time, due to the large number of companies in and outside Japan competing.
To stay competitive, Tokuyama will raise the performance of all related departments and increase the level of interdepartmental collaboration (see illustration).
In the development of the antihypertensive agent, Candesartan, which was released in 2014, Tokuyama had to satisfy the need for a highly stable API with a fine particle size for ease of dissolving and absorption. To meet these demands, Tokuyama studied and analyzed the particle state of the API in the brand-name drug, and set a target value for the manufacturing particle size, developing new crystallization and pulverizing technologies to achieve the target. Candesartan is now used by many pharmaceutical manufacturers as a highly dissolvable oral agent.

Leveraging the Control Functions of the Kashima Factory

Generic APIs become progressively more commoditized over time as the market begins to demand low-cost imported APIs. To cope with this commoditization, Tokuyama is working to strengthen its cooperation with overseas suppliers to manufacture the Company’s APIs while maintaining quality.
The Company expanded its multi-plant Kashima Factory in 2016 and is strategically positioning the plant to cooperate with suppliers in countries such as China and India, to address commoditization of APIs. The Kashima Factory will leverage control by transferring its expertise in areas such as quality assurance and manufacturing process technology to suppliers in and outside of Japan, while working closely with the suppliers to generate steady revenues.
Tokuyama is presently developing new APIs that are projected for market by 2020, as the Company expands its API lineup to cover a broader range of treatments. Additionally, the Company is actively looking into pharmaceutical-related materials that will also benefit its engineering development. Tokuyama is committed to leveraging its own technologies and comprehensive strengths in the healthcare field to bring amenity and healthy living to people.

Business Development Integrating Development

Leveraging Our Development Expertise and
Customer Support to Realize Further Growth

Fumiaki Iwasaki

Executive Officer, Research and Development Division
General Manager, Tsukuba Research Laboratories
General Manager, Medical Associated Department

The strength of Tokuyama lies in the way business development is integrated across development, manufacturing, marketing, and quality assurance. One example is the training in Good Manufacturing Practices (GMP) that the Quality Assurance Department has conducted for over ten years. This training is implemented with the joint involvement of manufacturing, engineering, and quality assurance teams from the Kashima Factory, to learn about pharmaceuticals manufacturing practices and regulatory changes.
These ongoing efforts have earned the confidence of customers in our quality assurance. We will leverage this reputation for quality to advance production in countries such as China and India. Our customers tell us that they trust Tokuyama’s quality, regardless of where a product is made. We will develop manufacturing processes that further raise our quality and cost competitiveness, as we make further inroads in the overall pharmaceuticals market.

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