TOKYO -- Japan's Sumitomo Chemical will make inroads into the emerging field of nucleic acid-based medicines, investing 4 billion yen ($35.7 million) in a domestic upstart.
The chemical maker is to acquire a nearly 20% interest in the company, Fukuoka Prefecture-based Bonac, through a new-share placement as soon as this month.
Nucleic acid drugs use DNA and RNA and directly target genes to prevent or cure diseases. Expectations are growing that these next-generation drugs will bring hope to those that suffer from cancer and central neurological diseases, for which few effective medicines exist. Some estimates have the market for nucleic acid medicines reaching 500 billion yen around 2020.
Sumitomo Chemical already holds a roughly 1% interest in Bonac, but the new investment will make it the second-largest shareholder after Hayashi Kasei, the startup's Osaka-based parent. Sumitomo Chemical is looking to gain board representation and send researchers.
Established in 2010, Bonac possesses patents on nucleic acid medicines in Japan, the U.S. and Europe. Its expertise in the field has attracted other companies, including the Fujifilm Holdings group, as minority shareholders. Bonac is currently working toward commercializing a nucleic acid treatment for lung fibrosis in five years.
Sumitomo Chemical already handles subcontract production of pharmaceutical intermediaries at a plant in Osaka. Using the investment in Bonac as a springboard, the Tokyo-based company aims to build a system that will enable its group companies to handle everything from development to manufacturing of new drugs. It will also consider bolstering production facilities to allow mass production of drug raw materials.
Major U.S. drugmakers such as Pfizer are leading development of nucleic acid therapies, but the market still remains wide open, with only a few such medicines released so far. Sensing opportunity, Japanese players are entering the market. Nitto Denko, whose diverse operations encompass medical fields, has started offering synthesis of nucleic acids. Chemical maker Nippon Shokubai has taken a stake in a startup working on nucleic acid treatments.