Fujifilm just one of several struggling manufacturers jumping into medicine

by Katie Forster

AFP-JIJI

When Japan announced it was ready to supply a new drug to help combat the deadly Ebola virus, one unusual detail emerged — it would be made by Fujifilm.

The company synonymous with cameras and photo booths said it could start producing Avigan, which Japan has already approved to treat the flu but which scientists think also could crimp the vicious illness.

Fujifilm’s expansion from pictures to pills through health care subsidiary Toyama Chemical is a business move being echoed by other manufacturing giants, including Sony, Panasonic and Toshiba, as fierce competition, a shrinking domestic market and their fall from global dominance in electronics nudges them into new spheres.

“We are currently developing our medical activity to create a comprehensive service that covers everything from diagnostic prevention to treatment,” said Shigetaka Komori, CEO of Fujifilm, in a presentation on its website.

It’s not all about fighting disease, however — Fujifilm also makes anti-aging face creams under the brand Astalift, which can be found alongside the more traditional names in the cosmetics business.

“We are adding a variety of medicines, dietary supplements and cosmetics to the radiography film and equipment and mammography apparatus already in our collection,” said Komori.

Fellow high-tech titan Sony has also leveraged its expertise to meet demand in medical science, incorporating technology usually found in Blu-ray Disc readers into the design of a new cell analysis device used in cancer and stem cell research.

The switch in focus is part of an effort by President Kazuo Hirai to “make medicine a central part of the group’s development” as he looks to stem losses that have left Sony in the red for five of the past six years.

Rival Panasonic, whose profits are making a wobbly recovery from combined losses topping $15 billion in the previous two fiscal years, has also tried its hand at medical machinery.

One of its brainchildren is a robot named Hospi, which transports medicine from one place to another at a hospital in Osaka.

Meanwhile, Toshiba has gone one step further by opening its own hospital in central Tokyo that is outfitted almost entirely with its own brand of machinery and equipment.

The rapidly aging population makes the sector a smart bet for companies in search of growth, said Hiroshi Nakamura, a professor at Keio Business School in Tokyo.

“The pharmaceutical industry in Japan is one of the few industries in which its domestic market is expected to expand for years, despite the declining population in Japan,” he said.

Barriers to entry that might stymie other players — such as technology and regulation — can often work in favor of electronics companies, which are accustomed to doing rigorous research, said Nakamura.

And the fact that many of their original product lines are in trouble adds a certain sense of urgency.

“Fujifilm is one of the few companies which has managed to enter the market, thanks to, for example, technologies developed under its film business, a strong sense of crisis (because there is) no hope for the film business, and a clear policy for differentiation against the existing big pharmaceutical companies,” he said.

But it is not only electronics companies that have decided to dabble in the medical market. The sector has also attracted companies more usually associated with products that are frowned upon by doctors.

Beer maker Kirin produces a range of medicine used to treat cancer, kidney disease and high blood pressure through a sister company.

And while Japan Tobacco churns out millions of packets of Winston, Benson & Hedges and Camel cigarettes, it also runs a medical research laboratory, and is now marketing its own anti-HIV compounds and treatments for melanoma.

Although pharmaceutical pursuits only account for 2.7 percent of Japan Tobacco’s revenue, it is keen to derive further healthy profits from its medical projects even as it continues to peddling cigarettes.

“We strive to strengthen the profit base through value maximization of each product and research and development promotion for the next generation of strategic compounds,” Japan Tobacco’s Associate General Manager Dmitry Krivtsov said.