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Revolutionizing diagnostics: a deep dive into cutting-edge medical in Japan

Interview - November 27, 2023

Delve into Japan's evolving medical market and regulatory framework, with TAUNS’ ImunoAce, a pioneer in rapid testing kits, leading the way in disease detection.

MASAKI NONAKA, PRESIDENT AND CEO OF TAUNS LABORATORIES, INC.
MASAKI NONAKA | PRESIDENT AND CEO OF TAUNS LABORATORIES, INC.

I'd like to start by hearing your perspective on Japan's potential as a market for medical development. The primary criticism revolves around the slow regulatory framework. Nevertheless, in specific domains like regenerative medicine over the last decade, significant policy changes have been implemented to address this misperception. What are your insights regarding the strengths and weaknesses of Japan's medical market and its regulatory framework?

Our products are subject to the Point-of-care testing (POCT) approval process, which typically takes 6–8 months to complete. The turnaround time of the regulatory process is not a critical issue for our business. Furthermore, during the COVID-19 pandemic, products related to SARS-CoV-2 (COVID-19) antigen testing were approved in approximately 3 months as an expedited review due to the flexible response by the MHLW and PMDA, which allowed for a smooth product launch.

The SAKIGAKE Designation System has not been applied to POCT products. We are planning to launch a new innovative POCT product in the future, and hope to apply the system to it.

An example of regulatory improvement is the approval of POCTs for respiratory infections as OTC medications last year. This approval was limited to SARS-CoV-2-related products. We believe that there are other infectious diseases that are also suitable for OTC medications, and hope that the number of products covered by OTC medications will increase in the future.

 

During the COVID-19 pandemic, as a company specializing in manufacturing rapid testing kits for influenza and similar diseases, it must have been a tremendously busy period for your organization. Could you please provide a detailed account of the events that transpired during this time, starting from the initial lockdown measures and leading up to the moment when the government approached you for assistance in addressing the crisis?

The COVID-19 outbreak began in 2020, initially prompting strict restrictions that effectively slowed down the virus's spread. Consequently, there was limited demand for our influenza testing kits, as hospitals were cautious about admitting patients with fever, further reducing demand. However, in the autumn of the same year, we launched the ImunoAce SARS-CoV-2 testing kit, which gained widespread adoption in hospital testing procedures.

In the years 2021-2022, we reached our production capacity limits. Initially, our factory operated only during daytime hours on weekdays. However, due to the escalating demand for COVID-19 testing kits, we had to transition to day and night shifts, and also weekend production.

In the latter part of 2022, the government began welcoming numerous international visitors. Additionally, there was a resurgence of influenza during the summer. At the start of this year, respiratory-related diseases became more prevalent. During the COVID-19 pandemic, mask-wearing reduced immunity levels, rendering people more susceptible to various respiratory diseases.

 

A significant challenge observed with COVID-19 self-testing kits is the widespread occurrence of false negatives. Individuals experiencing symptoms may take the test and receive negative results, subsequently venturing out without masks and infecting many others. While some false negatives can result from user error and incorrect kit usage, could you please outline the specific measures and efforts your company has undertaken in the development of ImunoAce to mitigate the occurrence of such false results?

False negatives and variant strains have been a problem in controlling the spread of COVID-19 infection, but we have responded appropriately by providing high-quality products based on our accumulated technologies.

The following three points are important to reduce false negative results.

The first is the appropriate sample pretreatment with extraction buffer. The proprietary sample extraction buffer that we have traditionally used is known for its ability to react efficiently with the nucleoprotein (NP) of the target viral antigen while minimizing the adverse effects of sample-derived components on the reaction system, and it also works effectively in the SARS-CoV-2 kit.

The second is to develop antibodies with high sensitivity (and specificity) to the SARS-CoV-2 antigen. We are continuously working to improve the antibodies. Initially, we launched ImunoAce SARS-CoV-2, but we have since evolved to ImunoAce SARS-CoV-2 Ⅱ, which features more sensitive and precise antibodies. Moreover, we are planning to launch a new product using the improved antibodies.

The third is the optimization of the overall formulation (relentless pursuit of balance among trade-off factors such as sensitivity, specificity, detection time, and storage stability). The know-how accumulated from nearly 30 years of developing antigen tests and the daily efforts of our researchers have enabled us to establish an optimal formulation in a short period.

Obviously, false negatives due to insufficient sensitivity of the kit should be avoided because they may result in missing a positive patient. On the other hand, it is also clinically very important to prevent a negative patient from being considered positive due to a false positive caused by insufficient specificity of the kit. Sensitivity and specificity are generally in a trade-off relationship, but our kits manage this issue by aiming for high sensitivity while maintaining high specificity.

Regarding swabs and sample extraction, in medical institutions, swabs are typically inserted deep into the nasal cavity for testing. However, when individuals perform self-testing, they often only swab the entrance of the nostrils, potentially leading to less accurate virus collection. To address this challenge, we pioneered the development of a COVID-19 testing kit using saliva, marking the first instance of such a product in Japan. Initially, we aimed to make it available over-the-counter (OTC), but we are currently experiencing higher demand from medical institutions. We hope to pursue OTC availability for this product in the near future.

 

Is the infectiousness of a disease linked to its detectability? Given that COVID-19 is highly infectious and necessitates extensive sanitation, mask-wearing, and social distancing measures, it might seem that a very infectious disease would be straightforward to detect. Is there a correlation between the level of infectiousness of a disease and the ease with which it can be detected?

The ease of detecting an infectious disease is not solely determined by its level of infectiousness, as we gather samples from various sources like the nose, throat, and saliva. Detection becomes more straightforward when the virus is present in higher concentrations within the extracted samples. Conversely, if the virus is not located within the body or is deep in the lungs, the effectiveness of the kit diminishes.



In the past three decades, Japan's population has consistently declined, leading to an increasing strain on the National Health Service (NHS) and the healthcare system. Consequently, there's a noticeable shift from a treatment-focused model to one of a prevention model. People are increasingly inclined to use over-the-counter (OTC) medications for self-care to alleviate the burden on the healthcare system. Do you view this shift in the healthcare model in Japan as an opportunity for your company, or does it signify a greater need for your company to expand its exports overseas?

Some of the respiratory POCTs marketed by us are in high demand in pediatrics, and it may be that the pediatric market will eventually decline due to low birth rates and an aging society.

On the other hand, SARS-CoV-2 is known to be particularly severe in the elderly, and the need for testing is expected to remain high for years to come. We will continue to contribute to early diagnosis through the stable supply of POCT.

In an aging society, it is also important to extend healthy life expectancy through prevention and early diagnosis of chronic diseases.

We have identified Chronic Diseases and Disease Prevention/Pre-symptomatic Diseases as priority business domains after Infectious Diseases. We are devoting our development resources to these domains.

 

You previously mentioned the interest in your ImunoAce product, both domestically in Japan and overseas. Given your emphasis on SARS-CoV-2 products and the concern over false negatives, there appears to be substantial demand for high-quality products in neighbouring countries such as China and Southeast Asia. Could you specify which countries are displaying interest in your products and if there is a particular market that has a pressing need for them?

Currently, we export our products to approximately 30 countries, with a focus on East Asian and European nations. Before the onset of COVID-19, conducting infectious disease testing using Point-of-care testing (POCT) was not a widely adopted standard. In fact, Japan led the way in utilizing POCT for such testing, conducting more POCT tests than any other country. The emergence of COVID-19 brought about a significant shift in this regard, as people realized the effectiveness of POCT in diagnosing infectious diseases. As a result, a few billion tests are conducted annually.

However, there is intense price competition in overseas markets, particularly from Chinese manufacturers with significantly lower production costs. Over the next two years, we will work on restructuring our approach to be more competitive in terms of pricing.

 

When you mentioned "reconstruct yourself," were you referring to restructuring in terms of product offerings, technological advancements, or an overall strategic approach, such as establishing new sites or forming partnerships?

Our approach will involve modifying the components used in the kit. In the Japanese market, there is a demand for exceptionally high-quality details. However, in overseas markets, as long as the product effectively serves its purpose, the aesthetic quality does not need to be of the highest standard. Therefore, we plan to make changes to the parts and components to reduce costs while preserving the kit's accuracy.

Additionally, we aim to establish an overseas production facility to manufacture our products abroad, which will substantially reduce costs.

 

Japanese products are often associated with higher costs, but they frequently incorporate advanced technologies. Your company utilizes Platinum-Gold Colloid Technology, also known as the “black line”. Could you provide an introduction to this technology and explain how it impacts the efficacy or sensitivity of your testing? Additionally, what factors contribute to your belief that this product is superior to other testing products produced by companies in Japan and abroad?

While many other companies utilize gold colloids that produce a red line, we differentiate ourselves by using a combination of platinum-gold colloids, resulting in a black line in our immunochromatography tests. The white background paired with the black line enhances visibility, making it easier to interpret the results. The larger size of the colloids contributes to heightened sensitivity as well. These factors, including the color and the larger particle size colloids, significantly impact the effectiveness and sensitivity of our tests, providing a distinct advantage.

 

Will your products introduced in markets where high specifications are not required still feature the platinum-gold colloid technology and maintain the same level of effectiveness as the products offered in Japan? Are you planning to develop entirely new products with new names tailored for the Southeast Asian market, or will you retain the same product names while adjusting the specifications to suit this market?

We will continue to incorporate the platinum-gold colloid technology in all our kits, and we plan to retain the same names when we introduce our products to new markets. Our core purpose revolves around cost reduction while preserving the high quality and advanced technologies inherent in our products.

 

Are you actively seeking partnerships similar to your collaboration with iBody, where you can source specific components at reduced costs from potential partners?

We are actively seeking partners who can provide us with components that can help us reduce our overall cost. Our primary concern isn't solely focused on cost reduction; rather, we aspire to establish partnerships similar to the one we have with iBody, which contribute to elevating the quality of our product lineup.

 

Could you please describe how the partnership with iBody was initiated, and what are your expectations and goals for this partnership?

One of our external directors facilitated our introduction to iBody. Initially, we approached them to create antibodies for a specific project, and the collaboration proved very successful. Consequently, we decided to enter into a business partnership in the areas of In Vitro Diagnostics (IVDs) and Point-of-care testing (POCT). In January of this year, we started our investment in their company.

 

Your company is relatively young and is celebrating its 36th anniversary this year. When we return for another interview in four years, what goals and dreams do you hope your company will have realized by then? Furthermore, what type of global reputation do you aim to have established for your company during that time frame?

Currently, we have been operating within the field of immunochromatography technology, but we recognize its limitations in terms of sensitivity and volume. As a response, we are actively developing digital immunoassay technology, which represents a new type of Point-of-care testing (POCT) with sensitivity levels comparable to PCR. This technology will enable us to conduct large-scale testing simultaneously for multiple diseases. Importantly, it is not limited to infectious diseases but extends to conditions like cancer, Alzheimer's, and various others.

Over the next four years, our primary focus will be on establishing the foundations and further developing our digital immunoassay technology.

In the realm of our international business, there has been a significant shift in the mindset towards In Vitro Diagnostics (IVDs). In the past, there was minimal demand for diagnostic tests for diseases like influenza overseas, as people often chose to stay home, knowing it would typically resolve within a week. However, the recent recognition of the importance of testing for proper disease diagnosis has led to increased demand. This applies to a range of diseases, including COVID-19, dengue, malaria, and many others. We aim to expand our product lineup and offer our kits as diagnostic solutions to countries in need of them.

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