TOKYO -- The discoveries by newly anointed Nobel laureates Tasuku Honjo of Japan and James Allison of the U.S. have opened up a market for revolutionary cancer treatments that is expected to quintuple to 5 trillion yen ($43.8 billion) by 2025.
The work by the two immunologists, who share the Nobel Prize in physiology or medicine, created the foundation upon which the blockbuster immunotherapy drug Opdivo was developed.
The drug is projected to bring Japan's Ono Pharmaceutical, which developed it with U.S. company Bristol-Myers Squibb, 90 billion yen ($790 million) in sales this fiscal year. Ono Pharmaceutical shares jumped 6.9% in early trading on Tuesday and hit 3,430 yen, the highest level since August 2016. The closing price was 3308 yen,up 3.5% from the previous day.
The company has worked with Honjo for nearly 30 years, sending researchers to his lab. Ono Pharmaceutical celebrated Honjo's Nobel win with an announcement, saying, "We appreciate the fortune to have worked on joint research together."
Honjo discovered that immune cells contain a surface checkpoint protein, called a programmed death receptor 1, or PD-1. Tumors evade detection by producing another protein, PD-L1, that attaches to PD-1 and deactivates the immune cell. Opdivo works by interfering with PD-L1's ability to attach to PD-1, thereby enhancing the immune system's response to cancer cells.
Treatment with Opdivo has been shown to be effective in fighting cancer and some patients have emerged cancer-free. But the drug is expensive, with a 100-mg bottle costing 730,000 yen. That translates to more than 30 million yen, or $260,000, for a year's supply.
In Japan, the medicine's high price prompted fears that it would drain government coffers, given the strain the country's aging population already puts on the budget.
The government took the unusual step of halving the price of Opdivo last February, ahead of biennial drug price revisions scheduled for this fiscal year. The treatment is revolutionary not only in a pharmaceutical sense, but also in how it has spurred debate on reining in drug costs and reforming social insurance programs.
That revenue, together with roughly 40 billion yen in Opdivo licensing fees, will form a large chunk of Ono's estimated group sales of 277 billion yen for the current year through March. After Opdivo debuted, Ono's market capitalization doubled to about 3 trillion yen in 2016.
In addition to Opdivo, there are four other major immunological anticancer agents that chases the PD-1 channel globally -- Imfinzi, developed by U.K. maker AstraZeneca; Tecentriq by F. Hoffman-La Roche of Switzerland; Keytruda, by U.S. company Merck; and Bavencio by the German maker Merck.
Other companies, such as Novartis International of Switzerland, are also developing similar products.
Nikkei staff writer Eri Sugiura contributed to this report.