FAST TIMES IN PHARMACEUTICALS

Merger puts Japanese exec atop industry

by

Kyodo

Tadataka Yamada is set to become one of the most powerful players in the global pharmaceutical industry with an annual budget of 2.5 billion British pounds (about 425 billion yen) at his fingertips and a highly talented workforce in Europe and the United States under his command.

If the planned merger between SmithKline Beecham PLC and Glaxo Wellcome PLC is given the OK this summer by regulators, Yamada will take control of the new company’s massive research and development facilities.

Yamada, who currently heads the research and development department at SmithKline Beecham, is already one of the highest-ranking Japanese executives working for a British company.

The merger of the two British companies into Glaxo SmithKline PLC — the world’s biggest pharmaceutical company in terms of share price and market share — will cement this position.

The 54-year-old Tokyo native believes the merger will allow him and his team to fully exploit the human genome — the blueprint of human life currently being mapped out in detail by scientists across the world — and find new drugs to treat a whole range of illnesses. He says he looks forward to the new challenges ahead.

“I have a great driving ambition to create products for the relief of human suffering as quickly and efficiently as possible. I believe that with a 2.5 billion pound budget every year I’m going to have the tools that I’ve never had before,” he said.

“We have to rethink and take full advantage of the windfall, not only of the dollars, but also the enormous talent of the people,” he said.

He feels that the “windfall” has come at just the right time to allow him to capitalize on recent key scientific developments.

“If it (the merger) had come a year or two later we might not have been able to capture that value from the genome sequence, which pretty much will be finalized within the next couple of years,” he said.

He explained that since the genome map will contain every target for pharmaceutical invention in man, those companies with a critical mass of expertise and scale stand to reap the greatest gains from that window of opportunity.

Yamada has followed an untypical career path to the boardroom of one of Britain’s top companies — leaving academia for the private sector just four years ago.

Born in Tokyo’s Setagaya Ward, Yamada was 15 when he left Japan to study in the United States. In 1983 he joined the University of Michigan as professor of internal medicine, serving as chairman of the department between 1990 and 1996, after which he joined SmithKline as an executive director.

While admitting to having a few regrets about having spent all his working life outside Japan, he believes he would not have been as successful had he stayed in his home country.

“Although I had offers to go back to Japan to work when I was younger, it seemed that the opportunities were more flexible for young people in the United States than they were in Japan, particularly in the academic field,” he said.

“I was 50 when I joined SmithKline at a senior level. Part of that was the fact that I was an outside director and most Japanese corporations don’t have them. They have outside representatives but not real outside directors,” Yamada said.

During his first two years at the company as a nonexecutive director, he said the senior executives got to know him well enough to feel comfortable about bringing him into a more senior position. “I doubt that that would have occurred in Japan,” he said.

At SmithKline, Yamada has around 8,000 employees under his control and a budget of around 1 billion pounds (170 billion yen) to research new drugs.

He spends about 40 percent of his time in London, 40 percent in Philadelphia and the remainder “on the road.” He says the company sees itself as being thoroughly global, which is reflected in the rich mix of nationalities on its board.

Yamada feels that if Japanese pharmaceutical companies are to grow, they should adopt a more global perspective.

“The Japanese have a strong pharmaceutical industry, but its primary market has been domestic and this is regulated in terms of pricing by the government. The net effect is that all the companies face zero growth unless they can expand their horizons beyond Japan,” he said.

He predicted that Japanese pharmaceutical companies will in the future be looking at developing their own sales organizations within the U.S. and Europe rather than relying on licensing agreements.

Yamada is excited about the future of the pharmaceutical industry and says that as science progresses we will see new treatments develop as well as cures for some of the biggest killers.

“I think that cures for certain diseases are a possibility as we learn more about the fundamental biochemical basis for human disease,” he said.