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A monthly review of the latest developments in Japan’s IT, telecom, and life sciences sectors

October 2004 - Volume VII, Issue X

Triangle Technologies is the leading Japan Israel business development and investment advisory firm
www.triangletech.com

Dan's Desk

From Triangle's CEO

Japan and Jazz:

Remember the song, Jazz is Paris and Paris is Jazz? When I have a rare free evening or weekend in Japan, I crawl around back alleys looking for some good music to listen to. After near-exhausting the Blue Note in Tokyo (they have some great shows, not cheap), and drowning in smoke in a dozen other less respectable dives (e.g. Manhattan in Asagaya) I can make the following questionable generalizations:

1. There is increasingly good jazz in Japan! Lew Tabackin played last week at TUC with a great collection of Japanese musicians, including saxophonist Joh Yamada, who was superb.

2. People are starting to relax. Although it is still not the norm to see feet tapping and head nodding and other far out (hah) forms of exhibitionism, for the first time in my experience there was not a person sitting at the normally straight-laced Blue Note - Big Chief Bo Dillis and the Wild Magnolias had everyone on their feet (including yours truly of course).

3. Although Japan has a planned image, there is some great improvisation. I heard the local jazz group Sleepwalker twice, once at the high end JZBrat, and the other at the low end Room - at the Room they improvised for at least 2 hours, and no one could sit still. Most of the time they played one piece (as far as I could tell) that went on and on. But the Room is that kind of place.

So what does this say about doing business in Japan? (I admit, this is stretching it a bit, but I have a deadline to meet): Well, for one, it is possible to have fun too. For another, Japan is not only what it seems to be. There are strong underground currents, that move in different directions. There are lots of contradictions. There are huge differences between Japan at night and Japan at day. Japan can be as raucus and rambunctious in the dark hours as it can be laced up and up tight in the light. And for a third, Japan is constantly changing, absorbing foreign culture while continually inventing and disseminating its own. (remember: Japan is a huge exporter of culture).

So that is all for now. I hope I can write something more interesting next time!

Good luck,

Dan

***TRIANGLE TECHNOLOGIES NEWS***

+QUANTOMIX STARTED TO WORK WITH M&S

QuantomiX Inc. and Triangle Technologies announced that QuantomiX has signed an exclusive distribution agreement in Japan with M&S Instruments Trading Ltd. of Osaka, Japan. QuantomiX sells a proprietary line of capsules which enable SEM (scanning electron microscope) users to image wet samples, representing a breakthrough in imaging for the scientific, pharmaceutical, cosmetics, and other markets. According to the agreement, M&S will market and distribute QuantomiX’s capsules to Japanese SEM users in biological sciences, pharmaceuticals, health care, and other industries.

ISRAEL-JAPAN NEWS

+SEMINAR ON INVESTMENTS

The Israel Japan Friendship Society and Chamber of Commerce conducted, on October 20th, a seminar on “Japanese Capital Investments and Cooperation in Israel”. Around 70 people spent four hours listening to the experience of Orbotech, TIS, Pegasus, Magic, Vertex, Medica, H&H and Triangle. ITX provided the view of a Japanese company and Dr. Yafe from the Hebrew University gave the macro view.
We learnt quite a few very practical and extremely interesting things such as how to acquire Japanese operations, what are the added values of a Japanese investor and how they look at Israeli companies, what are the trends (seems positive!) and more.
The Ambassador gave his vision and was asked “when will we enjoy direct flights” – evidently, not soon.
We would like to thank the Friendship Society for their initiative and organization.

+MITSUBISHI ELECTRIC SELECTS EPON DEVICES FROM PASSAV? FOR JAPAN´S FIBER-TO-THE-HOME DEPLOYMENT

Mitsubishi will supply a complete access network solution that combines Passav?´s optical line terminal (OLT) and optical networking unit (ONU). Passav?´s second generation Ethernet passive optical network (EPON) chipset is compliant with the newly ratified IEEE 802.3ah standard. Japan is the world leader in deployment of fiber-based Internet access. The Mitsubishi-Passav? partnership coincides with a surge in demand for FTTH in Japan.

***BUSINESS NEWS***

+FAMILYMART TO OPEN 1ST U.S. OUTLET BY MAY 2005

(Kyodo, October 9) - Major convenience store operator FamilyMart Co. plans to open its first U.S. outlet in Los Angeles by next May and eventually operate 200 stores in major U.S. cities on the West Coast in four years. The firm, whose total overseas outlets came to about 11,000 as of Aug. 31, is likely to become the first Japanese convenience store operator to enter the U.S. market, where such stores originated. The stores will have 200 square meters of retail space which is almost twice as big as the average FamilyMart store in Japan.

+RECENT BROADBAND STATISTICS

(Converge Network Digest, October 4th): -
As of 30-Aug-2004, Japan had 1,601,432 FTTH lines in service, according to the country's Ministry of Home Management, Public Affairs, Posts and Telecommunications, up from 960,926 FTTH users at the start of 2004. For comparison, as of 30-Aug-2004, DSL users in Japan numbered 12,549.066.
As of 30-Aug-2004, Yahoo! BB had approximately 4,426,000 broadband lines in service and 4,183,000 VoIP accounts. The company had 3,610 switching centers in service.

+JAPAN MUST OPEN DOOR TO FOREIGN WORKERS

(The Japan Times, Oct. 11) - The government needs to look at the broader picture and actively work to open the domestic labour market to unskilled workers so Japan is not alienated from the global community. That is according to a Foreign Ministry panel that compiled a report urging the government to create a national consensus on accepting more unskilled labor from abroad amid the rapid graying of society.
Japan has encouraged foreigners with certain skills, including engineers and academics, to work in the country. However, it has basically refused to allow unskilled people to enter due to such fears as deterioration in Japan's labor conditions, a rise in crime and concerns that overall social costs could increase with a huge influx of such workers. Nevertheless, the government estimates that about 580,000 of some 760,000 foreigners currently in Japan -- including illegal residents -- are engaged in unskilled labor. A large number of them are foreigners of Japanese descent or those who initially came to Japan as company trainees or exchange students. The panel expressed concern over various problems that foreigners such as Chinese, Brazilians, Filipinos and Peruvians face in their daily lives. The panel report calls these foreigners "newcomers," as opposed to ethnic Koreans in Japan, who while making up the largest group are gradually shrinking in number. These "newcomers" are often exploited, suffering from poor working conditions and unpaid wages, and are usually excluded from the nationwide health care or pension systems.

***GENERAL TECHNOLOGY NEWS***

+JAPAN DECIDES TO DEVELOP MISSILE DEFENSE SYSTEM WITH U.S.

(October 11, Japan Today) - Japan has decided to develop the components for interception missiles with the United States, moving forward the ongoing joint technological research on a missile defense system to a development stage amid U.S. pressure to advance the project.
The two nations began the research program in 1999 for a system to launch interceptors from Aegis destroyers. Japan has spent 15.6 billion yen up to fiscal 2003. The joint research covers four areas — infrared ray sensors for identifying and tracking missiles, high-performance shields to protect interceptor warheads from air-attrition heat, second-rocket propulsion units, and kinetic warheads for destroying warheads of incoming ballistic missiles.

+VENDING MACHINES OFFER WIRELESS NET ACCESS

(Kyodo, October 10) - A Nagoya hotel said Friday it has installed vending machines that enable guests with personal computers to wirelessly access the Internet. The hotel, Silk Tree Nagoya, said two vending machine maintenance service firms came up with the idea to encourage more businesses to install vending machines.

+DOCOMO TO OFFER IN-FLIGHT ROAMING SERVICE

(October 7, Kyodo) - DoCoMo Inc said it will offer a roaming service to enable airborne passengers to access its Mzone wireless local-area-network service in a tie-up with Connexion by Boeing, an Internet access service unit of U.S. aircraft maker Boeing Co, starting on Oct 22.
Subscribers to the LAN service will be able to use the Internet during flights by accessing the Connexion by Boeing website with their personal computers and entering their Mzone usernames and passwords.

+VISIBLE LIGHT COMMUNICATIONS USING LEDS

(Oct 5, JCN Newswire) - Visible light communications are a technology for the transmission of information using light that is visible to the human eye. This technology is rapidly approaching the practical application stage thanks to the increasingly higher performances and expanding applications of light-emitting diodes (LEDs). This Japan-original technology will be unveiled at CEATEC JAPAN 2004.

***LIFE SCIENCES AND ENVIRONMENT NEWS***

+TAKEDA TO MARKET TAVOCEPT, PHASE III CHEMOPROTECTIVE AGENT, IN U.S. AND CANADA

(JCN Newswire, October 7) - Takeda Pharmaceutical has entered into an alliance agreement with U.S. based pharmaceutical company, BioNumerik Pharmaceuticals, Inc., to market Tavocept(tm) in the United States and Canada. Tavocept is a chemoprotective agent developed by BioNumerik that is currently in Phase III human clinical trials. Under the terms of the alliance agreement, Takeda's wholly owned subsidiary Takeda Pharmaceuticals North America (TPNA) Inc. will market Tavocept.
The alliance agreement provides for an upfront payment of U.S. $52 million to BioNumerik in the form of an equity investment by Takeda in addition to development milestone payments, funding for future Tavocept research and development, and commercial milestone payments based on the achievement of specified sales targets. Takeda and BioNumerik will share net profits from the sale of Tavocept in the U.S. and Canada on an equal base.
BioNumerik is developing Tavocept as a chemotherapy supportive care drug to prevent or mitigate the incidence, severity and duration of neuropathy, which is often caused by certain commonly used classes of chemotherapy drugs.

+OSTEOPOROSIS DRUG CANDIDATE CHS13340 SHOWS USEFULNESS AT PHASE II CLINICAL TRIALS CONDUCTED IN JAPAN

(JCNN, October 6th) - Chugai has announced that its 'CHS13340' intranasal PTH therapy being co-developed by Chugai and Daiichi Suntory Pharma in Japan possesses an osteogenic effect, and has been regarded as a promising treatment for osteoporosis. Although a few cases of transient increases in blood calcium levels after intranasal administration were observed, patient blood calcium levels returned to normal on the following day, and no clinically significant adverse events were observed.

+ONCOTHERAPY SCIENCE, BIOWA TO JOIN HANDS IN ANTIBODY DRUG DEVELOPMENT

(JCNN) - OncoTherapy Science (OTS) has announced that it has decided to sign a memorandum with Kyowa Hakko Kogyo's US subsidiary BioWa to forge a new business partnership in antibody drug development. Under the expected alliance, the companies will develop an advanced antibody drug designed for the treatment of cancer, based on superior antibodies produced by OTS and POTELLIGENT.

+SUNTORY, FUKUYAMA UNIVERSITY, UNIVERSITY OF SHIZUOKA SHOW THAT MODERATE WHISKY DRINKING MAY PREVENT DIABETES COMPLICATIONS

(JCNN, October 21st) - Leading Japanese beverage manufacturer Suntory announced the latest results of its joint research with Fukuyama University and the University of Shizuoka. The joint industry-academia research group has uncovered that whisky has a property to inhibit aldose reductase activity. This unique property is magnified as the ripening period in oak barrels gets longer. Aldose reductase is a factor that accelerates and worsens diabetes complications. The research group has concluded that moderately drinking whisky is beneficial for preventing diabetes complications.