TOKYO - Eisai CEO Haruo Naito unveiled plans to revamp the company's research and development structure in hopes of having his employees produce better results, Naito told analysts Feb. 27 in Tokyo.

"Our past research and development activities…have not been going well," Naito said. "Most of our projects experienced delays and many of them dropped off the pipeline. We have been finally getting approvals lately, but considering the original timeline, there have been major delays. Our productivity has not been high."

Naito pointed out that with such results ¥150 billion had been spent. "We want to improve matters all at once."

Naito says his company will be shifting its R&D functions to what he calls a "product creation" structure. Naito's office will be supporting the activities of six product creation units, responsible for a drug's life cycle from invention and discovery to submission for approval. There will also be six "core function units," which will act as the arms for technological, regulatory and operational support of the products.

Eisai's six product creation units will be comprised of neuroscience, oncology, antibody led by Morphotek, immunological anti-inflammatory diseases, a unit covering late stage drugs - including eritoran for severe sepsis and Aciphex ER (rabeprazole). The last unit, the clinical research center, will be in charge of clinical trials in Japan.

In between the production creation and core function units will stand Eisai-subsidiary KAN Research Institute, Naito said. The KAN Research Institute in Kobe has been the place for Eisai where academia meets industry, a place for the company to seek out discovery research. He said the organization is in a stage where several antibody products will be entering into clinical trials. "In the future, this would be the first-ever venture spun off from Eisai, so this would become a PCU," he said.

The six core function units are to be comprised of chemistry, manufacturing and control; drug metabolism and pharmacokinetics/toxicology; biomarker/pharmaco-omics; next-generation systems; clinical support and regulatory affairs.

Naito described the unit leaders to be the stars of the company. "These 13 scientists will have a strong motivation for product creation, and they will be active autonomously."

Naito emphasized that the unit heads are a good mix of people who have been with Eisai for their whole career and people who will bring a new perspective, such as the KAN Research Institute unit leader, who has no previous ties to Eisai. The Morphotek head will bring bioventure expertise and MGI Pharma's chief scientific officer will head the "frontier product creation unit" that covers drugs for the immunological anti-inflammatory area. Eisai acquired a number of antibodies in development with its Morphotek acquisition and bolstered its oncology pipeline with its MGI Pharma acquisition (Also see "Eisai Raises U.S. Oncology Business Weight With MGI Pharma Acquisition" - Scrip, 6 November, 2008.).

The CEO said the restructuring was based on Eisai's new strategy to create products based on customer needs that may be urgent or underlying.

Naito touched on the development of its once-a-week transdermal patch for Alzheimer's disease drug Aricept (donepezil), which will now be developed by Teikoku Seiyaku and its subsidiary Teikoku Pharma USA. Eisai says it terminated its development agreement with its original partner, Osaka-based Nitto Denko, due to "differences in future strategies." The CEO said this Phase I drug's NDA submission in the U.S. is targeted for fiscal year 2009. Naito said he did not expect a timeline delay due to the partnering switch.

Pfizer co-promotes Aricept in the U.S., and it is unclear what impact a Pfizer-Wyeth merger would have on partnering plans for future Aricept formulations. Wyeth has Alzheimer's drug bapineuzuman in Phase III development with Elan and Pfizer has a deal with Medivation for dimebon, currently in Phase III trials(Also see "Eisai Sees Generics Opportunity In Japan For Innovator Companies" - Scrip, 2 February, 2009.).

Naito gave an update on Eisai's European Knowledge Center in Hatfield, U.K., which will create 600 jobs. It will have a production facility and will run clinical studies and basic studies on neuroscience. It will also serve as the European command post for Eisai. Naito said the facility should be operational June 26. The production component is already in operation.

Naito said Eisai wants to increase the volume of its products especially in China, where the company plans to increase medical representatives from 540 staff to 1,000 staff by 2011 and expand its territory to 130 cities from the present 100 cities.

India, which Naito called the "the fourth knowledge creation base," is the other area in Asia where Eisai has a major interest. Eisai is investing about ¥5 billion in its production plant in Vizag (Also see "Japanese Pharma Majors Expanding Into India" - Scrip, 20 January, 2008.).

CFO Hideaki Matsui said dividends for shareholders will go out as management sees fit and confirmed Eisai has no plans to buy back shares at this time.

- Yuriko Nagano (pharmasia@elsevier.com)

Eisai Plans R&amp;D Structure Revamp, Hoping To Turn The Development Tide

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Eisai Plans R&D Structure Revamp, Hoping To Turn The Development Tide