Healthcare Business Unit
As of September, 2017
We will boost existing businesses and accelerate the creation and nurturing of new businesses in the healthcare, medical, and biological fields.
Corporate Vice President
General Manager of Healthcare Business Unit
Q: Although you were placed in charge of the new Healthcare Business Unit, could you please summarize the fiscal year ended March 31, 2017, for the former Microscope Solutions Business Unit and Medical Business Development Division?
In the former Microscope Solutions Business Unit, we succeeded in growing the market share of our mainstay biological microscope business and in steadily advancing operations in two areas of the regenerative medicine field: contract manufacturing of cells and cell quality assessment.
Looking first at the biological microscope business, sales were down year on year due to the impacts of negative foreign exchange influences and delayed government budget execution in the United States. Nevertheless, we were able to increase operating income in this business through cost reductions. Measures to augment sales capabilities led to growth in our market share that was in line with our initial target, placing the top position in the industry within sight.
In regard to cell quality assessment in the regenerative medicine field, we are currently engaged in joint research projects with multiple universities and research labs, including the Center for iPS Cell Research and Application (CiRA) at Kyoto University. We have developed a cell quality assessment system utilizing image analysis technologies that employ Nikon’s accumulated microscopic observation technologies and cutting-edge pattern recognition technologies. This system is already being used for various cell quality assessment applications. In contract manufacturing of cells, Nikon CeLL innovation Co., Ltd., a wholly owned subsidiary established in 2015, sought to absorb technologies and expertise regarding contract manufacturing of cells for the regenerative medicine field from partner company Lonza. In addition, the construction of systems necessary for providing contract development organization (CDO) services is progressing as planned.
In the former Medical Business Development Division, our focus was on achieving rapid growth in the business of Optos Plc, a retina diagnostic imaging equipment company that was acquired in 2015 Efforts to this end included forming a strategic alliance with Verily Life Sciences LLC in the field of machine learning-enabled solutions. Verily is a life science research and technology development company that shares the same parent company as Google Inc.: Alphabet Inc. Through this alliance, we have begun joint development of new artificial intelligence (AI) technologies and solutions to help contribute to the early diagnosis and treatment of diabetic retinopathy and diabetic macular edema. By providing easy-to-use diagnosis solutions to ophthalmologists, optometrists, and diabetologists, we hope to advance diagnosis and treatment methods for individuals suffering from diabetes-related eye diseases while helping manage the condition of patients in whom such diseases have already appeared. At the same time, Optos witnessed strong sales of its ultra-wide field retinal imaging devices, leading it to achieve an operating margin of 20% on a non-consolidated basis. Overall, the former Medical Business Development Division recorded an operating loss. However, this was largely a result of up-front investments in business expansion and was in line with our plans.
Q: How will the Healthcare Business Unit develop its business going forward?
The integration of the two former businesses took place on June 29, 2017. As such, our first task should be to quickly integrate and optimize the organizations and functions of the two entities in order to generate business synergies.
In the biological microscope business, we can expect new technologies to keep being introduced into the market. It will therefore be vital for us to maintain an understanding of the latest research trends. Simply improving the performance of our products will not be enough; we must provide researchers with optimal solutions based on an accurate understanding of their needs. Accomplishing this task will require that development and sales functions work together to enhance the entire marketing process, from demand research to product and application development.
Moving on to the regenerative medicine field, February 2017 saw the conclusion of a business and capital alliance agreement with HEALIOS K.K., a company that Nikon has been investing in and supporting since 2013. HEALIOS is a biotechnology company that stands at forefront of renewable medicine development with a pipeline containing several new drug candidates with high potential to be brought to practical application. In addition, Nikon aims to leverage its expertise in cell quality assessment and contract manufacturing of cells in order to generate synergies in the regenerative medicine field. Nikon CeLL innovation will begin contract manufacturing of cells at the new production facilities that will become operational during the fiscal year ending March 31, 2018. These facilities will be compliant with good manufacturing practices (GMP) for medical equipment. It will be important for Nikon CeLL innovation to take advantage of new business opportunities.
We are currently operating under a basic policy of expanding into new fields after generating steady results and establishing foundations to a certain degree in the ophthalmological diagnosis field. Accordingly, we will proactively promote joint development between Optos and Verily during the fiscal year ending March 31, 2018. We believe it will be possible to create diagnosis solutions that utilize AI technologies to judge the presence of illnesses and their stage and offer related advice based on retinal images taken with Optos’ ultrawide field retinal imaging devices. Such solutions would allow for diagnosis to be made with ease by ophthalmologists and optometrists as well as by diabetologists. Furthermore, we are developing technologies to take advantage of the fact that the retinas are the only part of the body in which blood vessels can be observed directly to diagnose illnesses affecting the entire body, such as hypertension and arteriosclerosis. Optos has previously focused its business activities on Europe and the United States. Going forward, however, we aim to expand this company’s operations into other regions. Currently, the aging of the population and changes in dietary habits seen around the world are driving an increase in diabetes. This trend is stimulating a rise in the need for ophthalmological examinations, and we thus anticipate steady growth in demand in the future.
The Healthcare Business is one of the Nikon Group’s growth businesses, and it is therefore crucial that we continue to create results, even during the restructuring period. We will aim to generate synergies between the operations of the former Microscope Solutions Business and Medical Business Development in order to develop these operations into new growth businesses. I feel a heavy responsibility in my position, but I am also intensely motivated in this role. I am thus committed to contributing to increased quality of life (QOL) for people by using Nikon technologies.
Biological microscopes／Cell Culture Observation System／Ultra-wide field retinal imaging device