A man, Stefan Sandstrom, is giving a keynote speech at the BioStock Global Forum 2024. He is dressed in a black blazer and a patterned shirt, holding a clicker in one hand and gesturing with the other. He is wearing a headset microphone and has a lanyard with a name badge that reads "PRESENTER" around his neck. The background shows the event's stage with curtains.

BioStock Global Forum 2024 – May 30, Part II

Watch the keynote speech, including the Q&A session on  YouTube.

Welcome to an in-depth look at the BioStock Global Forum 2024, where industry leaders gather to share insights and innovations shaping the future of healthcare. In this keynote speech, Stefan Sandstrom, Founder and CEO at Biosector, dives into the dynamic landscape of Japan’s pharmaceutical market. With nearly two decades of experience in Japan, Stefan provides a unique perspective on the opportunities and challenges that await international companies in this thriving biopharma hub. Join us as we explore his expert analysis on building successful business relationships, navigating cultural nuances, and leveraging Japan’s government support for the biopharma industry.


Without further ado, let’s get started. We have a big expert insights coming up and it’s called Big in Japan, Trends and Opportunities in the World’s Second Largest Health Market. Our expert for this session is Stefan Sandstrom, Founder and CEO at Biosector in Japan.

Welcome, Stefan. I should also mention we’re going to leave five minutes for questions for Stefan. So keep that in mind if you want to submit those, please go ahead.

Stefan Sandström, CEO of Biosector

Thank you very much. It’s wonderful to be here and I am approaching 18 years in Japan now. I have the best life you can imagine, if you like living in Japan, which I do. I’ve lived all the time in metropolitan Tokyo, which is around 40 million people, translated to four times Sweden. And it’s a wonderful place, I could talk for all the 30 minutes about it, but I won’t. So this is what draw me to Japan in the beginning, the martial arts of kendo.

And I do this a lot, I take it seriously and I do practice with the imperial palace guards, the personal bodyguards of the emperor of Japan. So that’s my pride.

Okay, so what I do, I help non-Japanese companies to do business with Japanese pharmaceuticals.

And I do this in various capacities, I can be just a representative, I can be a supporter, coach. I can also be a mentor or an agent or a sales representative. It matters what the customer wants, I’m quite flexible. I see myself as a catalyst to make business happen, that’s what I like. I like also when people grow, so both things. And for clarity, I never invoiced a Japanese company, so there you go.

Okay, so let’s talk about what Japan is. We have a biopharma boom, it is the second largest market in the world. We have a government who is wholly supporting this industry. It’s considered one of the nine key industries of Japan for the future. And the government put in 25 billion dollars into making Japan the world leading bioeconomy by 2030.

And 25 billion dollars, that is enough money to make a huge difference. So think about that, it comes with many things that happen. And what they want to do, there are so many incentives for international collaboration between academia, academia, academia-business, business-academia, and business-business. Japan really wants to stand out as a country that is not insular anymore. They used to be, but they don’t want to be in this industry. They have realized that we need the world to grow.

And one of the things you can check out on the internet is GTB, Greater Tokyo Biocommunity. Everything you would ever need, as wet labs, animal testing, various types of laboratories, and what are called hubs, are there and it’s listed in a good way.

Let’s talk about the Japanese language.

It is very complex. 和、WA here means harmony or peace, depending on context. And everything that happens in Japan is based in harmony.

So the problems come with language barriers. Luckily, this industry is inherently global and you will always find English-speaking people in all the companies. That’s easy.

You need to build relationships before you start building a business. So you need to establish rapport, you need to ensure that your ambition and your willingness to work with your partners for the long term is there. And you need to manage everybody’s expectations. Aligning the expectations of your partners, your suppliers, your customers, your people in Japan. Without that, you will not succeed.

I know this presentation is a little bit over the top, but I enjoy that.

So the stakeholders, the main ones that you need to be aware of and work with, is first of all the PMDA, which is the regulatory authority. And I want to underline, I am not a regulatory consultant, I don’t do reimbursement. So please don’t ask me those questions.

But they’re very important. They only work in Japanese, so you will probably need a local partner for this. Then we have the JBA, which is the Japan Bio-Industry Association.

They are the mother of Firm. So the Bio-Industry Association, they do everything bio, except regenerative medicine, ATMP and CGT. That is part of F.I.R.M.

And JBA and F.I.R.M., together with one more organization that I won’t talk about, they organize BioJapan Tradeshow every year in Yokohama. And it’s Asia’s largest and arguably best trade show to be at. And I’ve already met people today who were there last year.

You also have much help from the EU-Japan Centre. And especially if you’re an SME, they also have loads of reports and data sheets that are important. They’re free of charge.

And in Japan you also have JETRO, the Japan External Trade and Investment Organization. They not only have fantastic reports and data sheets to help you, they also give you support. They help you with target lists. They help you understand the ecosystem that you’re looking into for free. So you don’t need consultants like me for that. So the homework you can do yourself quite easily.

So how do you become successful in Japan then? Well, the first thing is to understand this thing about respect. We usually understand that quite easily. It’s very important in Japan. You will never find a whole country as prepared for everything as the Japanese people are. So customary, this is an example.

You send out a presentation two days before an important meeting with some notes. And all the people on the Japanese side of the meeting, they will have read this. They will have made notes.

They would have created questionnaires to be answered during the meeting. So they prepare on a completely different level than at least I was used to when I lived in Sweden. The politeness level is, if you’ve been in Japan, it’s everywhere in society. Even when you need to push yourself onto a train because it’s full, people do it in a polite manner.

I talked about harmony and I talked a little bit about ambition. If you’re not ambitious, why would anyone want to work with you?

This is one of my favorite words, 我慢, GAMAN. It is that very special Japanese sense of patience. I’m sure you have seen it in movies.

So in order to, how to say, what you can expect from doing business in Japan is one thing. But what you need to do business in Japan are basically these three things.

  1. You need a budget. You need to have a budget that is realistic.
  2. You need to have a plan based on reality, not wishful thinking.
  3. And you need to be patient.

It does help if you also have passion for what you’re doing. Because that is something that always shines through. And passion equals ambition.

And maybe all of you know this word, 外人, GAIJIN. It means foreigner. And as foreigners, we need to forge strong relationships in Japan, building rapport and building trust.

So you need help from the locals. You need lawyers, HR, regulatory consultants. You need accounting. You need scriveners. You need real estate agents. You need places to work.

So when you work with this, I think the most important thing is you need to think about working side by side. If it’s a customer, if it’s a supplier, it doesn’t matter. You need to work side by side. Because life is tough. But if we work together, it can be a little easier. 

The key market drivers that you should bear in mind

The first one I would want to highlight is the aging population. I’m sorry I put it in number two, but that’s a small glitch. The aging population of Japan means that, first of all, it’s the oldest society in the world.

They’re approaching an average age of 60 years. Which means that cancer and many other diseases like Parkinson’s and neurological problems are highly prevalent in Japan. Which, of course, means the market’s quite nice.

It’s a rich country. They have 120 million people, give or take. So historically, Japan has been insular because the market is big enough.

You could make, before large molecules came around, all the companies were basically focusing on the domestic market. But now that we have seen the rise of the new modalities, Japan has opened the borders. So some of the organizations that they had, their only purpose was to make it difficult for foreign companies to do business in Japan.

They put up so many trade barriers and they constantly invented new ones. Foreign companies were allowed to join the industry organizations, but only up to a certain point. There was a glass ceiling, meaning they could not be part of the important decisions.

The tragically murdered Prime Minister of Japan, Abe-san, he asked these organizations, actually he made them change this completely.

“Now your job is not to make it difficult to enter Japan. Your job is the opposite. Your job is to make it easy, as easy as possible for foreign companies to come here and compete with us and help us be stronger, help us learn.” 

And also, of course, help the Japanese people to be more healthy. So I would just go out on a small tangent, and this is why I like Japan.

It’s one of the reasons. So that year when Prime Minister Abe was shot, do you know how many other people were shot to death in Japan that year? Think about it, 120 million people.

Zero other people, that is correct. One gun death in a whole year in that country. So it’s a safe place.

When it comes to regulatory support, the PMDA, the regulatory body, they have opened or are about to open an office in Singapore and in the US. Unfortunately, not in Europe. And these offices will simplify the way to take the initial contacts with the PMDA in your own language.

That is a good thing also. The ecosystem is becoming increasingly collaborative in Japan. And for investors, and please don’t ask questions about this because this is a jungle, but if you do it right, your profits from investing in biotech companies or biologics or whatever are tax exempt. So that means that Japan had a big hurdle before with lack of funding, but now it is the opposite. Funding is rife.

Okay, next Japanese lesson, まじで, Majide. This means sincerely or honestly, like you could say it really.

I like this slide. I took it from the internet. I looked for a long time to find this, but this is from an official Japanese organization under the government. And they put together some data. It’s boring if I say so.

If you can read it, please do. And you can make your own conclusions. I will just be quiet.

I just assume you’ve read it. Let’s move on. So in Japan, there is a special verb called nomunication.

And NOMU is the Japanese word for drinking. And you know communication is the English word for communication. So nomunication is how business is actually being conducted in Japan.

So you have two kinds of meetings. You have the formal meetings where the Japanese will line up five, six, seven, ten people at a table and you sit on the other side. The only things you talk about are the things you agree upon, the things that are good, creating harmony.

So you should leave a formal meeting feeling good, like, yes, we are working on the relationship. We are doing things right. And what you never do in those meetings, you don’t discuss contracts.

You don’t do like we want to do in the West. We put the pig on the table and we discuss it. No, never gonna happen. It is rude. It is barbaric. And so what they do instead is that usually I take this role for my clients.

One person at the other side will be my counterpart. And we will go for coffee, for dinners, for drinking and discuss the real issues.

  • We don’t agree upon you on this bullet point.
  • We want to see it green.
  • We want to do it in a different way. 

And we try to iron out the differences and the things that we need to have done.

So those are the informal meetings, and that’s where the real things happen. And usually the informal meetings are very easy to navigate. Because when you come to that point, I mean, the due diligence will continue. But it means they’re interested in working with you. So it’s a very positive atmosphere, even if we need to iron out things.

And when it comes to strategy, you need to also have all these things that I don’t want to talk about. Reimbursement. I mean, that is a key point. If you can’t get a good reimbursement for your product, then it’s going to be difficult. And maybe you should look at a different market. Distribution is another strategy that you need to figure out how to do it well.

Because it is not like you just go and knock on the door. Hello, we need a distributor. They will do full due diligence on you, on your products, on your history. It takes at least six months. At least. Usually one year, I would say.

I won’t talk about the market fragmentation. But what happens? Okay.

I like talking about the trends. So what I see in Japan. Advanced modality pipelines.

The number of pipelines in R&D and during clinical trials is just increasing. Every month there are new pipelines being put out there. And not only Japanese ones.

Also non-Japanese companies having their products outlicensed or working with a partner in a joint whatever capacity. And there is also a large run for precision and personalized medicine.

And maybe the most interesting trend is AI. I could talk at length about it. I will talk a little bit about it soon. And this is, I take this one first.

So I will bring two cases. This is a case from a few years back. Biophorum is a British biopharma manufacturing membership consortium. It’s a long word. And they support the large manufacturing companies in the non-competitive space. They are not another advocacy group.

Because all of their work is led by facilitators that are hired by Biophorum. And they organize the big companies’ subject matter experts in various fields. They tried to get the Japanese companies to join. But it was very difficult. Because they were not there. So in two years time I helped fill up their sales funnel by working with the JBA, by working with important KOLs and setting up seminar series. Just everything.

So in two years time I managed to get three paying customers. And to have a membership in one of their forums, the investment is around, depending on the forum, between 50,000 to 150,000 dollars per year. So it’s not a small investment. And I’m still good friends with them. Even if I don’t work with them. I think what they’re doing is great.

I just recently started working with an American consultancy called Ascentio. They are in the space that is probably the most interesting for biopharma. The AI part with an estimated CAGR of over 30 percent over the next 10 years or so. If it’s true or not we will see when we know. But at least the potential is there. Because there is so much work to be done.

From automation to making every batch better than the previous batch when you’re manufacturing. They want to work with the Japanese pharmaceuticals, so I’m helping them with that. It’s going to be a very interesting ride. I just started so there is not so much I can say. I’m still learning the ropes. For me it’s also a very good way to stay relevant. To have a new challenge which is something I enjoy.

And this word maybe you all know it. ありがとう, ARIGATO means thank you in Japanese. 

I will go back to the previous slide.

I just wanted to show you the ninja dog. And with the ninja dog I say thank you for you coming here and listening to me. Thank you very much.



Stefan Sandstrom’s keynote at the BioStock Global Forum 2024 offers invaluable insights for anyone looking to enter or expand within Japan’s pharmaceutical market. His emphasis on the importance of cultural understanding, patience, and strategic planning serves as a vital guide for international companies aiming to succeed in this competitive arena. As Japan continues to open its doors to global collaboration, the opportunities for innovation and growth are immense. Stay tuned for more expert insights and updates from the forefront of the biopharma industry, and don’t miss the chance to leverage these strategies in your own business ventures. Thank you for reading, and we look forward to your thoughts and comments.

Watch the keynote speech, including the Q&A session on  YouTube.

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