On a cloudy morning in the Tokyo suburb of Tsukuba, Ibaraki Prefecture, Yoshiyuki Sankai points excitedly to a slide of severed spinal cords. They belong to rats, and he has used cell technology to help reconnect the nerves.

A multimillionaire whose robot company, Cyberdyne Inc., went public last year, Sankai is researching ways to repair damaged body tissue. The 57-year-old scientist’s vision: to treat patients with spinal injuries by using stem-cell related technology to repair nerve connections and robotic suits that aid movement.

His plans are getting a boost from new policies promoted by Prime Minister Shinzo Abe, who pushed liberalization of rules to make Japan one of the world’s quickest places to get regenerative therapy on the market. Now Japanese corporations spanning the pharmaceutical and industrial sectors have regenerative medicine on their agendas, and industry groups estimate the domestic market for these therapies could top ¥3 trillion by 2050.

Investors are putting money into research that explores the potential of cells to repair damaged organs and tissues, or reverse degenerative diseases like Alzheimer’s. While scientists globally have worked for years in this field, treatments have been slow to come to market. But there is hope in Japan that without the political red tape, promising therapies will emerge faster and there will be speedier rewards.

“It’s a game changer, and we expect investment to keep pouring in to Japan,” said Sanjeev Kumar, a consultant at market research firm Frost & Sullivan. “After years of struggling with slow returns on investment, regenerative medicine companies across the world see a faster path in Japan, and they’re watching closely.”

Regenerative medicine is a broad umbrella that includes treatments around stem cells and gene therapy that are intended to restore the function of damaged organs and tissues.

Sankai’s company Cyberdyne is setting its sights on better treating spinal injury patients by combining multiple approaches. It makes robot exoskeletons for physical therapy, and these bionic suits can read bioelectric signals from the patient’s muscles, helping movement in the disabled. Inspired by Isaac Asimov’s “I, Robot” as a child, Sankai says his years of mapping out the brain’s nerve network for his robots fits with the research into repairing rat spines with stem cells and proteins. His hope is eventually to use various treatments together.

Japan’s Healios K.K. is developing a treatment for an eye disease called macular degeneration that causes vision loss. Electronics giant Hitachi Ltd. announced a joint research project in cell therapy for Parkinson’s Disease in July; while Australian developer of stem cell therapies Mesoblast Ltd. is looking at more partnership deals in Japan after the regulatory changes, said its chief executive officer, Silviu Itescu.

Fujifilm Holdings Corp. this year spent some ¥33 billion on Cellular Dynamics International Inc., a U.S. company developing stem-cell products for drug testing. It supplies derived human cells to pharmaceutical companies doing trials on new drugs, providing them with an alternative to conducting tests on animals.

Faced with an aging population, Abe is seeking to foster technologies that could create new treatments for patients while potentially providing a boost to Japan Inc. The idea is to have new industries wean the world’s third-biggest economy away from its dependence on autos.

Regenerative medicines in Japan can now get conditional marketing approval based on results from mid-stage, or Phase II, human trials that demonstrate safety and probable efficacy. Once lagging behind the United States and the European Union on approval times, there is now an approximately three-year trajectory for approvals, according to Frost’s Kumar. That compares with seven to 10 years before.

While the market potential is huge, technological challenges still need to be ironed out, said Atsushi Seki, a Tokyo-based health care analyst with Barclays PLC. Therapies that use the patient’s own cells could be tougher to monetize and researchers will also need to find ways to handle transplants that are rejected by the body, he said.

The price of such therapies has been one hurdle. Around the world, companies have also faced setbacks while pushing such treatments. In the U.S., Geron Corp., which started the first nation-approved trial of human embryonic stem cells, ended the program in 2011, citing research costs and regulatory complexities.

With new treatments expected to come online in the next few years, the government, which has a national health care program, now needs to come up with affordable payment models. Seki said he is watching to see how the country will set reimbursements for Temcell, a Mesoblast cell therapy distributed by JCR Pharmaceuticals Co. Expected toward the end of the year, if its price is disappointing, that could discourage the entire industry from developing such treatments, Seki said.

Despite the challenges, researchers like Sankai believe the new policies set the stage for various technologies to come together and new therapies to emerge.

“The speed of development is amazing: every day it’s going faster,” Sankai said in an interview at Cyberdyne’s headquarters, surrounded by a few of his robot prototypes. “But technology is only technology. What’s important is how they’re installed to the people.”

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.