Annual Report 2015 Technology and Quality Section Terumo... · Terumo Medical Innovation, Inc....

Annual Report 2015

R&D and Production

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7

14

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Global R&D System

Utilization of Intellectual Propertyin Each Business Segment

Patents/ Measures against Counterfeit Products

Global Production System

Quality Management in the Factory

Technology and Quality Section

Vascutek Ltd.

MicroVention, Inc.

TerumoBCT, Inc.

Terumo CardiovascularSystems Corporation

TERUMOTerumo Europe N.V.

R&D Headquarters

Ashitaka Factory

Fujinomiya Factory

Kofu Factory

Terumo Clinical Supply Co., Ltd.

Terumo Medical Corporation

Terumo MedicalInnovation, Inc.

Terumo Penpol Ltd.

The Terumo Group’s R&D Bases (as of October 1, 2015)

The global medical device market is undergoing seismic shifts. As the aging of Japan’s society continues, the industrialization of healthcare and nursing care has led to a flood of new entrants from different business sectors. On the other hand, emerging countries are seeing rapid growth in their medical device markets as development of healthcare infrastructure progresses in step with economic advancement. Moreover, Western countries are

demanding medical device products and systems which offer even higher medical cost efficiency as the curtailment of medical expenses has become a key priority.

As the market landscape becomes increasingly complex in these ways, Terumo works to develop and introduce new products that meet regional market needs, with the aim of growing to become a strong presence on the global stage.

Global R&D System

1TERUMO CORPORATION Annual Report 2015 Technology and Quality Section

•General HospitalProducts Division

•D&D Division•DM and ConsumerHealthcare Division

General HospitalCompany

BloodManagement

Company •New Development•Planning &AdministrationDepartment

•Core TechnologyCenter

•Evaluation Center•Software SolutionCenter

R&DHeadquarters

Company R&D

Corporate R&D

• IS Division•Neurovascular Division•CV Systems Division•Vascular Graft Division

Cardiac & VascularCompany

Cooperate with and Support Company R&D

R&D tailored to company business strategiesIntegrated management of development, production, and sales

In addition to the transfer of control of new products, Corporate R&D develops competitively superior basic technology and handles efficacy and safety evaluations for applications.

Also, to strengthen R&D capabilities, it engages in human resource development and works to create new development approaches.

Development of next-generation

products, and development leading

to new businessesCooperate with and

support Company R&D

R&D System Based on Globalized Business-led Management

Under our business-led management, we pursue R&D for the Terumo Group along two vectors: Company R&D and Corporate R&D. These two groups are collaborating to promote group-wide R&D activities.

Company R&D is in charge of developing product pipelines that are consistent with the business strategies of the eight businesses that are responsible for integrated management of everything from product development and production to sales in their particular areas, based on the management strategies of the three companies.

Corporate R&D is led by the R&D Headquarters.

R&D System Based on Globalized Business-led Management

Corporate R&D carries out R&D toward coming up with next-generation products for existing businesses, and creating new businesses for existing companies. It also performs the function of further developing Terumo’s competitively superior basic technologies and evaluates to acquire the efficacy and safety data required for submitting regulatory applications. To strengthen Terumo’s overall R&D capabilities, Corporate R&D engages in human resource development and works to create new development approaches.


Needs in medical settings Management insightson business

ExternalDevelopmentActivities

New OpportunitiesVenture capital

(EMP-II )

On-Site DevelopmentIncubator utilization

Venture business establishment Dir

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g/Co

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Idea

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InternalDevelopmentActivities

Search Project-based Approach

Processes for New Development

Medtech Design Team (Two each on the left and right) Development at Terumo Medical Innovation, Inc.

External development activities take place on a global basis. Silicon Valley is a prime example. In October 2013, we committed to invest in Emergent Medical Partners II (EMP-II), a venture capital fund managed by Dr. Thomas Fogarty, a prominent cardiac surgeon and inventor. A key aim of this investment is to gain early access to technologies being developed by promising

Corporate R&D’s mission is to create new value through innovation. Accurately assessing needs in medical settings, it advances new development activities focused on early commercialization. It has created a development system spanning from early-stage development to commercialization along two axes—internal development and external development activities —and conducts broad searches to create future product portfolios.

Through internal development, Corporate R&D advances new search activities in specified fields and has engineers and associates from across a broad range of functional specialties identify front-line needs. Furthermore, having adopted a system of project teams which include outside experts, it also strives to achieve swift

commercialization with a clearly defined target. Applying the “Biodesign” approach advocated in the practical education program at Stanford University, Corporate R&D launched the Medtech Design Team in fiscal 2014 to develop innovative medical devices. Under the Biodesign development approach, unrecognized medical setting needs are identified through direct observation of medical settings. A search is then conducted for technologies that meet the identified needs and a prototype is developed. At the same time, a strategy is developed considering factors such as required intellectual property, regulatory approvals, and reimbursement prices, in order to advance the entire endeavor to final commercialization.

venture businesses. At the same time we established Terumo Medical Innovation, Inc. and transferred it to the Fogarty Institute for Innovation, an incubator operated by Dr. Fogarty. Terumo Medical Innovation is now pursuing development intended to form the base of future commercial activities.

Initiatives for Giving Rise to Innovation


FY1999

FY2002

FY2005

FY2008

FY2011

FY2012

FY2013

Cardiac & Vascular•Acquired the cardiovascular business of US-based 3M Company Cardiac & Vascular•Acquired Vascutek Ltd., a UK-based maker of vascular and cardiovascular prosthetics Cardiac & Vascular•Acquired MicroVention, Inc., a US-based maker of neuro-interventional products Cardiac & Vascular•Acquired Clinical Supply Co., Ltd., a Japan-based maker of products used in the radiology field Blood Management•Acquired CaridianBCT Holding Corp., a US-based maker of blood component collection systemsCardiac & Vascular•Acquired Harvest Technologies Corporation, a US-based developer of point-of-care cell therapies* •Acquired Onset Medical Corporation, a US-based maker of large internal diameter sheaths Cardiac & Vascular•Formed strategic alliance with AngioCare Medical Technology Co., Ltd., a China-based developer of renal

denervation technologyCardiac & Vascular•Acquired an exclusive acquisition right in France-based Arterial Remodeling Technologies S.A., a developer of

bioresorbable scaffold technology•Invested in Emergent Medical Partners II L.P., a US-based investment fund, to gain access to new medical technologies

Enhancing Development Capabilities through M&A

* In October 2014, Harvest Technologies Corporation was transferred to the Blood Management Company, from the Cardiac & Vascular Company.

Since 1999, Terumo has been actively acquiring companies and technologies, and establishing subsidiaries, on a worldwide basis. Obtaining technologies, strengthening product lines, and capturing market share have been important objectives in undertaking these activities. Another

To realize synergy with these subsidiaries outside Japan, Terumo in recent years has actively assigned engineers from Japan to foreign subsidiaries to encourage co-development with local engineers. The Cardiac & Vascular Company, for example, has assigned coronary and peripheral intervention development personnel to work with MicroVention, Inc. engineers in the U.S. on coils, stents, and other devices used in neurovascular interventions.

Moreover, to respond to healthcare regulations in each country, Group companies collaborate with one another and some of the headquarters functions of Terumo business divisions that have been placed outside Japan. This way Terumo has created a structure that enables faster global launch of new products.

We have also been collaborating actively with other companies. In April 2013, for instance, we signed

Boosting Development with M&A

key interest, however, has been the creation of synergy; combining fundamental technologies that have long been our strength with those of other companies, to give rise to new value through technological innovation.

an agreement with Kaneka Corporation, to expand our peripheral-interventional business through the co-development of PTA (Percutaneous Transluminal Angioplasty) balloon catheters, which are used to treat peripheral (lower extremity) artery disease. In March 2014, we entered into an agreement with Arterial Remodeling Technologies S.A. (ART) of France to acquire exclusive acquisition rights to that company, which is developing a bioresorbable scaffold technology. Under the agreement, we will also pursue joint development of a drug-eluting bioresorbable scaffold and make incremental investments in ART.

By actively collaborating with other companies while investing in our own development activities, we are expanding the markets we serve beyond our existing fields of business.


Essential technologies commonly required for the development and manufacture of medical devices are improved and enhanced on a daily basis and shared throughout the Terumo Group. One example is technology that augments biocompatibility. Medical devices are used for diagnostic and treatment purposes by accessing the patient’s body in many different ways. Some medical devices make contact with the surface of the patient’s body, while others are inserted within the body or implanted in the body for extended periods of time. For this reason, a key priority is how to access the patient’s body safely while minimizing any undesirable physical burden on the patient. Enhancing the biocompatibility of a product by developing materials that inhibit allergic reactions, blood clotting or other responses, and making structural enhancements, can be one factor that distinguishes a product as an outstanding medical device.

Furthermore, materials used in medical devices

must offer various characteristics, such as light resistance, deformity resistance, sterilization resistance, and pharmacological compatibility, according to the application. Terumo’s wealth of experience and technology in the materials field is put to good use in the entire process from the development and selection of appropriate materials, to processing and forming into shapes that reflect user-friendliness and other considerations.

In the performance of processing, molding, sterilization, and other production operations on these materials, Terumo applies an efficient, rigorous quality assurance system based on technologies and expertise (production technology) underpinned by many years of proven experience. In addition, each Terumo factory amasses production technologies related to the products it manufactures, while taking part in a cross-factory system to assist with production at other factories. This ensures a high-quality production system at all factories.

Upgrading, Improving, and Sharing Fundamental Technologies


PostmarketSurveillance

Sales

Applicationfor

ApprovalClinical Trial

SafetyEvaluation

PatentApplication

andResearch

Development

Basic Flow Chart from Development to SalesMedical devices represent the integration of an extremely diverse range of elemental technologies from a host of scientific disciplines, including physiology, biochemistry, pharmacology, cell technology, polymer technology, material processing technology, and electronics. Because of their use within the human body, regulatory authorities in Japan and elsewhere have set the bar for safety exceptionally high for approving the manufacture and sale of these devices.

As discussed earlier, the Terumo Group has a variety of elemental technologies, and the bulk of its human resources possess highly sophisticated expertise. However, to stay ahead in a medical devices industry made fiercely competitive by new entrants from outside industries, and deliver new products to society at a rapid, steady pace, the Company must have an organization framework capable of applying existing in-house elemental technologies and outside technologies in product development, controlling the flow linking every stage from product development to sales, and dealing with the very rigorous approvals process specific to medical devices.

To achieve this, Terumo’s R&D Headquarters is strengthening its project management function for expediting research through to commercialization. The two-pronged structure consists of groups responsible for seeking out new medical needs and underdeveloped technologies to draw out new value, and those charged with developing these into products for mass production. The bases underpinning this structure are located in the R&D Headquarters and key Terumo factories. This configuration establishes an environment in which the entire process from initial R&D stages for new products to mass production stages can occur unimpeded.

As part of this structure, Terumo’s own evaluation center has the capacity to evaluate devices along physical, chemical and biological dimensions. The evaluation center can gather the experimental data the R&D Headquarters and each factory need for R&D activities, enabling non-clinical studies, which precede clinical trials, to be performed in-house. This capacity has the added merit of enabling Terumo to acquire expertise in performing safety evaluations responding to a diverse range of technologies.

In addition, numerous departments are functionally interlinked from the early stages of development, allowing for efficient conversion of R&D activities into viable products. These departments include those that coordinate clinical trials, those responsible for

Organizational Capabilities: The Link in Translating Technologies into Products

submitting applications in compliance with foreign and domestic regulatory affairs laws and negotiating with approval bodies, those that research and oversee post-market product effectiveness and safety matters, and an intellectual property department charged with the research and protection of intellectual property rights. In recent years, Terumo has promoted strategic collaboration with overseas subsidiaries, leveraging its competitive edge in having multiple development bases overseas to swiftly incorporate technology and develop new products. For example, Terumo has conducted clinical trials based on European Union regulations, under which trials can be implemented more speedily than in Japan. It has also performed simultaneous, multinational clinical trials in close collaboration with subsidiaries. These trials are aimed at obtaining early approval by sharing data obtained by the approval bodies of each country.

Terumo has honed this organizational framework—one that can smoothly support processes from product development through to sales—in the course of business activities over its long history as a medical device company, and as a result of such initiatives as proactive M&As and business alliances with other leading companies around the world in recent years. As such, this framework makes up a vital part of the intellectual assets that support Terumo’s strengths.


Misago peripheral stent

Ultimaster drug-eluting coronary stent

Terumo currently operates in three core business segments while exploring new fields that are expected to drive future business. Each business segment has unique characteristics based on differences in products, intended users, and other attributes. Terumo plans and promotes optimal business development initiatives for each business segment by combining proper materials, production technologies, and regulatory affairs strategies.

The product management of each company is

The Cardiac & Vascular Company is a good example of a business where Terumo combines two elemental technologies—coating and metal alloy/metal processing. For example, we have incorporated superelastic metal alloy technology into our guide wires for angiography, and laser processing technology into PTCA (Percutaneous Transluminal Coronary Angioplasty) balloon catheters. In addition, application of our hydrophilic coating (M Coat) to both of these products plays a key role in achieving improved accessibility to deep blood vessels. We have also combined these elemental technologies with precision

We employed our proprietary Zig-Zag 8 cell-2 Link structure, made of nickel-titanium alloy, to give outstanding flexibility and durability to the Misago peripheral stent. The addition of an ergonomic handle also enables simple, precise single-handed stent deployment to further increase ease of use.

Our new drug-eluting coronary stent Ultimaster employs bioresorbable polymer as its drug coating material. In addition, polymer and drug are applied only to the surface to contact vessel tissues. These features are expected to reduce the rate of very late stent thrombosis. It is based on unique stent design with a cobalt chromium alloy. These features are designed to enable the physicians to navigate the stent in tortuous anatomy and facilitate placement of the stent conformable to vessel curvature, further reducing stress on vessel wall for improvement of prognosis.

* Winner of a 2014 Good Design Award

comprised of two components—advanced products and platform products. Advanced products are innovative, high-growth/high-margin, and short-life-cycle. Platform products are stable-growth/high-margin, long-life-cycle products offering upgraded and improved performance. In managing products, stable earnings of platform products are invested in advanced products, and then the brand image and technologies of advanced products feed back into platform products.

processing and microfabrication to achieve high flexibility in our stents.

Terumo’s long-term goal is to become a company with a global presence. To realize this goal, we are applying technologies nurtured in the cardiac and vascular field to enhance product pipelines in medical imaging, peripheral intervention, and neurovascular intervention, where the our elemental technologies, precision processing, and miniaturization technologies have also been put to good use.

Basic Policy

Cardiac & Vascular Company

Utilization of Intellectual Property in Each Business Segment


* TRI (Transradial Intervention): Interventional therapy to introduce devices via an artery in the wrist

Hiryu Plus PTCA balloon catheter

The Glidesheath Slender TRI introducer sheath

Scepter C occlusion balloon

Attendant Nexus occlusion micro balloon catheter

To give our Hiryu Plus PTCA balloon catheter both durability and flexibility (to conform to the shape of blood vessels), we employ a three-layer structure combining a pliable material for the balloon with another, highly durable material. In addition, a reinforced shaft section enhances operability of the entire system.

The Glidesheath Slender TRI* introducer sheath employs a proprietary thin-wall technology to reduce the outer diameter of the introducer sheath with no effect on the inner diameter. This design enables greater access to thin radial arteries and reduces penetration resistance.

Scepter C occlusion balloon for neurovascular intervention employs a double-lumen structure that allows enhanced balloon stability on inflation, greater guidewire operability, and improved placement in tortuous peripheral blood vessels. We also apply a hydrophilic coating to the surface of the balloon portion and other parts of this product.

We redesigned the balloon of the Attendant Nexus occlusion micro balloon catheter to reduce the catheter diameter for better accessibility to peripheral blood vessels, and to make it easier to achieve the amount of balloon expansion needed for the target blood vessel.


* PCPS (percutaneous cardiopulmonary support) system: The PCPS system is used to provide temporary circulatory support for emergency cardiopulmonary resuscitation and cases of severe heart failure. Using components including a centrifugal pump, heart-lung machine, outflow and return cannulas, and drive unit, among others, this device supports the body’s circulatory system with substitute heart and lung functionality.

CAPIOX SP-200 for operating a centrifugal pump for PCPS system

SURPLUG AD closed infusion system

SURFLO V3 IV catheter with accidental needle-stick prevention function

General Hospital Company

The General Hospital Company provides medical devices and systems used for treatment at hospital bedsides and in the home. Terumo adopts technology that is responsive to the different ways medical devices are used. We offer value-added medical devices leveraging our

strength in pharmaceutical technologies; medical devices that emphasize safety for both patients and medical professionals, ease of use, and medical cost efficiency; and medical devices specifically for home health management and preventive medicine.

The CAPIOX SP-200 (commonly known as the “NEO”), a device for operating a centrifugal pump for PCPS system*, offers improved operability and features for better patient care. It has a larger display panel for easier viewing of its information output, is 40% lighter than previous models for greater mobility in emergency situations, and foregoes the need for a dedicated flow sensor connector. It also now features a patient history function for better monitoring of changes in flow volume, pressure, and other aspects of circulatory conditions.

We developed and in 2014 began selling in earnest the SURPLUG AD series of closed infusion systems, which meet a range of hospitalization and post-surgical needs for intravenous drips. The SURPLUG AD is a closed infusion system with a novel design that eliminates retention of liquids in the system, permitting administrations of tiny amounts of drug solutions. Furthermore, no special adapters are needed to connect syringes or I.V. devices, so drug solutions can be easily and swiftly administered. Device management is also simplified, and the risk of improper use is lowered. All of this adds up to greater ease of use for medical professionals, and economy for medical institutions. By offering these closed infusion systems, Terumo contributes to greater safety and efficiency in medical settings.

The SURFLO V3 IV catheter, launched in 2012, is one example of our responsive approach to technology adoption. To lower the risk of hospital-acquired infections, the SURFLO V3 employs a proprietary mechanism aimed at preventing accidental needle sticks and blood spatter. These features improve not only safety but also ease of use for medical personnel.


NANOPASS 34 pen-injector needle

Prefillable syringe(for pharmaceutical companies to fill and market as a finished product)

NICOPELIQ peritoneal dialysate

As a top manufacturer of needles, we have developed a wealth of technologies over many years. We apply these technologies to improve patient quality of life, with products that meet needs we have uncovered by taking the user’s perspective. One such product is the NANOPASS 34 pen needle for insulin injection. Available in Japan, Germany, Italy, China, and other countries, this needle’s thin design (unsurpassed in the world, based on Terumo research as of August 2013) and uniquely shaped tip ease the pain of injecting insulin. In 2014, cumulative sales surpassed one billion units including NANOPASS 33.

In addition, by combining this insulin-injection needle technology with plastic pre-filled syringe technology we have developed over many years in Japan, we are moving forward with the development of high-value-added prefillable (with drug agents) plastic syringes for overseas pharmaceutical companies. With the aim of establishing a unique business model in the plastic prefilled syringe space, we also work to develop high-value-added products compatible with drugs once considered too difficult to offer in prefilled syringes. These include therapeutic agents, biomedicine, and other drugs in high demand on the frontlines of medicine.

After commencing sales of peritoneal dialysate and its system in 1987, we began to develop products aimed at delivering comfort to patients in home care settings. Among the results of that initiative is NICOPELIQ, the world’s first neutralized peritoneal dialysate containing icodextrin. NICOPELIQ, launched in 2014, is a peritoneal dialysate that uses icodextrin as an osmotic agent and is mixed and neutralized by use of a two-chamber system, applying technology we developed for our infusion products. It is expected to mitigate impact on the peritoneal function, which is believed to be one of the factors peritoneal dialysis is discontinued.


HR Joint measuring devices system with communications functions

MEDISAFE Fit Smile blood glucose monitoring system

TACSI automated blood component processing system

Terumo’s blood management products, centered on blood bags, are used in more than 160 countries and regions around the world. Because blood collection methods and formulation methods for collected blood samples differ

Blood Management Company

As another high priority development theme, we are bringing together the collection of vital data and electronic medical recordkeeping in a range of new devices aimed at reducing the administrative burden of nursing staff. We have developed thermometers, blood pressure, blood glucose, and other measurement devices that use onboard data communications capabilities to streamline the entry of vital data into patient records. These devices free up nursing staff for other important tasks and eliminate problems with data entry omissions, mistakes, and delays.

The MEDISAFE Fit Smile is a new type of blood glucose monitoring system we developed for ease of use by both medical professionals and patients. Launched in Japan in 2014, the MEDISAFE Fit Smile is equipped with wireless communication capabilities for vital data and electronic charting functions, audio guidance, and a color display. For elderly and other patients who have weakened eyesight or difficulty with manual dexterity and require simplified operation or greater legibility, the MEDISAFE Fit Smile offers both audio and visual guidance for easy measurement of blood glucose. In addition, the use of different colors to signal different levels of blood glucose enables even first-time users to easily understand where

In developed countries, for example, blood transfusion therapy in recent years has come to be dominated by the use of blood component preparations, rather than whole blood from donors. In order to efficiently separate the blood components patients require from whole blood, Terumo and Andreas Hettich GmbH & Co. KG (“Hettich”), a well-established German manufacturer of centrifuge equipment for clinical laboratories, jointly developed the automated blood component processing system TACSI. Combining Terumo’s proprietary blood bag technology and Hettich’s centrifuge equipment, the system automates the process of extracting necessary components from blood, the raw material. This has improved the precision of the entire blood component production process and dramatically increased work efficiency, while contributing

their glucose level stands. By considering ease-of-use from various perspectives, we work to meet the needs of an increasingly diverse range of diabetes patients.

in each country and region, Terumo has teamed up with regional optimal partner companies to develop and supply products optimized for each market.

to safety advancements in blood transfusions through the homogenization and enhanced quality of blood component preparations.


* Conditional approval

Spectra Optia centrifugal apheresis system

Mirasol Pathogen Reduction Technology System

HeartSheet autologous skeletal myoblast sheets

Apheresis therapy (blood plasma exchange) has gathered attention in recent years as a new treatment alternative for patients with autoimmune, inflammatory, viral, and other intractable diseases for which causes have not yet been identified. Terumo develops and offers Spectra Optia centrifugal apheresis system for removing the patient’s plasma, including any pathogenic substances, and replacing it with donated plasma used in apheresis therapy for treating these intractable diseases.

We strive to increase the safety of blood components and create a safer system for providing those components for transfusion. As an example of our efforts, we participated in a 2014 project for responding to the spread of Ebola virus disease in West Africa. Part of this project’s work was performed using the Mirasol Pathogen Reduction Technology (PRT) system, which uses ultraviolet light and riboflavin (vitamin B2) to reduce the levels of, and inactivate, pathogens in blood.

Terumo is hard at work pursuing opportunities in regenerative medicine—a new field promising future growth—while also striving to achieve next-generation development and build new businesses in our traditional fields. Based on our corporate mission, “Contributing

New and Other Fields

On September 18, 2015, Terumo’s HeartSheet autologous skeletal myoblast sheets are the first cellular or tissue-based products to be approved* for manufacture and sale in Japan. Autologous skeletal myoblast sheets are made of expanded skeletal myoblast found in muscle tissue taken from the patient’s thigh. When transplanted to the surface of the heart, the sheets are expected to improve the patient’s heart condition significantly, so they are seen as one of the new options in treating patients with severe heart failure due to chronic ischemic heart disease. Terumo embarked on development of cell sheets in 2007, and it has been promoting joint research with Professor Yoshiki Sawa of Osaka University. In 2012, a clinical trial with seven cases was commenced at three medical institutions in Japan. The trial completed in 2014, and in October of that year we filed an application to Japan’s Ministry of

Regenerative Therapy: Developed in Japan — The World’s First Cardiac Regenerative Therapy

to Society through Healthcare,” we are developing new vaccine injection device, products focused on reducing pain and improving postoperative care, and applications for minimally invasive treatment devices in new fields.

Health, Labour and Welfare for approval to manufacture and sell HeartSheet autologous skeletal myoblast sheets in Japan. Development work continues with the goals of furthering the application of regenerative medicine and improving the quality of life for patients.


* Effectiveness of Acelio Intravenous Injection 1,000mg: Pain and fever when oral or suppository administration are difficult

Subcutaneous layer

Approx.2mm

Muscle

Epidermisand dermis

Injection into the dermis where many immune cells exist

Image of intradermal injection

New Vaccine Injection DeviceWhen we think of injections, three approaches come to mind—intravenous, subcutaneous, and intramuscular—but there is also a fourth. Intradermal injections are known to enhance the sensitizing potential of vaccines. They are expected to increase the number of patients who can benefit from vaccines with limited availability. Terumo and Daiichi Sankyo Co., Ltd. reached a basic agreement in April 2012 to commercialize new infectious disease vaccines administered using an intradermal injection device. We embarked on clinical development, with the hope of applying our respective expertise in the fields of medical devices and pharmaceuticals to create innovations that would create new value for medical settings. Terumo developed Japan’s first intradermal injection device, which offers a more easy-to-use, surefire method to administer the vaccine than current methods. Undertaken with Daiichi-Sankyo Co., Ltd. and two other development partners, our efforts resulted in an intradermal seasonal influenza vaccine. In April 2015, one of our development partners filed an application for manufacture and sale of this vaccine in Japan.

We are going beyond our traditional areas of business to develop products that deliver new value based on a thorough understanding of the needs of medical settings. Each of our companies has a core of intellectual property unique to its operations, and we will freely apply what one company has to the endeavors of another in our ongoing effort to develop innovative products and skills.

Terumo pursues development that makes medical treatment kinder and gentler in the field of surgery. “Acelio Intravenous Injection 1,000mg,” an intravenous injectable acetaminophen antipyretic analgesic which aids in the management of cancer-related and postoperative pain, went on the market in November 2013 as the first product of its kind available in Japan. We now look to expand our line of pain management products and take other steps to help improve patient comfort. Surgical adhesions are another QOL issue for patients and we

Minimally Invasive Treatment DevicesTerumo has for the first time ever taken up the challenge of developing therapeutic devices in the field of urology. Some of this work is being performed at a venture company we have established in Silicon Valley, one of the world’s most prominent locations for startups working to

are working to prevent them altogether. After surgery, internal organs can become firmly attached to the surgery site. These adhesions are known to occur with great frequency regardless of the type of surgery, and cause complications such as bowel obstruction, chronic pain, and infertility. To prevent adhesions, we have developed a spray-on gel adhesion barrier that is undergoing clinical studies in Japan.

bring new medical devices to market. On another front, we are also developing minimally invasive treatment devices to help the growing numbers of people suffering from lower extremity diseases.

Pain Management, Adhesion, and Other Postoperative QOL (Quality of Life) Improvement Initiatives


Fundamental Policies and Strategic Positioning

Conducting IP Development Activities across Divisional Boundaries

Fostering Awareness of Intellectual Property

Terumo believes that it is critical for a manufacturer to manage innovative ideas—as patents and other forms of intellectual property, and activities that strategically use intellectual property—and convert it into profit. In pursuing global intellectual property development activities, the Terumo Group places emphasis on fostering a culture of innovation and increasing its stock of intellectual properties.

At Terumo, engineers and intellectual property staff work closely together from the initial stages of development. Invention and the creation of new technologies are pursued based on a comparison of Terumo inventions with the patents and products of competitors, and consideration of both the direction that should be taken in development activities and the type of intellectual property portfolio that should be built. Terumo has created an environment

Terumo believes that raising associates’ awareness of intellectual property and stimulating their interest in this topic are vital to enlarging its valuable intellectual property portfolio. Based on this belief, Terumo internally disseminates news on intellectual property rights in various countries around the world in a timely manner. Every year, Terumo also conducts a wide range of training programs

The Terumo Group formulates and promotes global intellectual property strategies that are closely coordinated with both R&D and business strategies. This ensures that innovative ideas generated through global R&D activities, including overseas sites, provide a base of intellectual property that contributes to the profits of the Terumo Group’s global business operations.

in which intellectual property staff can casually consult with engineers to promote efficient intellectual property development. Terumo’s Intellectual Property Department works to strengthen patent application activities and intellectual property rights in countries and regions where an enhanced intellectual property portfolio is necessary to the growth of the Terumo Group through invention.

organized by the Intellectual Property Department. These programs are structured according to associates’ level and job category, ranging from basic courses to specialized practical skills training. These programs are a part of our efforts to enable endless creation of inventions and technical ideas.

Patents/Measures against Counterfeit Products


General HospitalBlood Management

New Field

39%Cardiac & Vascular

33%

25%3%

General Hospital

New Field

15%Cardiac & Vascular

38%

37%

Blood Management

10%

Number of Patent Filings in FY2014 by Business Segment

Patents Held by Business Segment as of March 31, 2015

For the fiscal year ended March 31, 2015, Terumo filed 478 patent applications in a first country, with 61% related to areas of existing business and 39% in new areas unconnected to current operations. This illustrates that Terumo is committed to improving its existing products while also investing actively in future business expansion into new areas.

As these activities make clear, Terumo must constantly safeguard and strengthen its brand image as it expands its businesses globally. Counterfeit products tarnish the Terumo brand and could negatively impact users who

As of March 31, 2015, Terumo held approximately 3,600 patents globally. Some 85% of these patents are related to existing businesses. However, our product management approach includes the application of new advanced product technologies to earlier basic products, so even inventions patented as technologies in new fields also contribute to existing businesses.

Number of Patent Filings by Business Segment

Number of Patents Held by Business Segment

Patent Portfolio

Measures against Counterfeit Products

trust it. As a manufacturer, Terumo has an obligation to take firm measures against counterfeit products. This includes identifying such products at an early stage through global surveys.


Terumo Group Production Bases (as of October 1, 2015)

Europe: 4U.K.: 3Belgium: 1

Americas: 8U.S.: 7Costa Rica: 1Japan 7

Outside Japan 17

24 bases

Japan:

7Vietnam: 2Philippines: 1China: 1India: 1

5Asia andOthers:

In recent years, Terumo has worked to further globalize its production. With our Japanese factories serving as principal manufacturing facilities, we are actively propagating and transferring control of production technologies to develop production centers outside Japan, mainly in Asia. We provide support that will enable stable production along with requisite performance and quality at factories outside Japan.

Back in Japan, where we have long been working to diversify our production configuration, we have established a new factory in Yamaguchi Prefecture. Having commenced operations in April 2014, this facility is now part of our Japanese production configuration consisting of the Fujinomiya and Ashitaka Factories in Shizuoka Prefecture,

and the Kofu Factory in Yamanashi Prefecture. In 2013, new buildings were added to existing plant

sites in Vietnam to increase production of interventional products, and in the Philippines, to increase production of syringes and needles. At the same time, a new factory was opened in Costa Rica to respond to demand for coils used to treat cerebral aneurysms. In 2014, construction of a second whole new factory in Vietnam was completed to meet the growing demand for transfusion products. By building a global production system with key factories in Japan and other parts of Asia, we are giving ourselves the ability to meet global demand while simultaneously enhancing cost competitiveness.




Strict quality control at a factory

Quality Assurance System That Meets International Standards

Terumo Quality Policy

Since we established a quality management system in response to European medical device directives in 1995, we have blended our international-standard system into an advanced quality assurance system based on the pharmaceutical GMP (Good Manufacturing Practice)*1 standard. We are now stepping up efforts to make our quality management system more robust, to meet ever-stricter global requirements.

Terumo is certified for ISO 13485*2, the international quality standard for medical devices and equipment, at all of its production sites in and outside of Japan. We also keep up to date with developments regarding Japan's PMD Act (the Act on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics) and regulatory trends and requirements for medical devices and pharmaceutical products outside of Japan, including the EU Medical Device Directives, US

Our top management establishes the Quality Policy, from which we develop, operate, and effectively maintain our quality management system.

Each division also sets quality objectives based on the Quality Policy. This was the Quality Policy devised by top management is incorporated into individual associates' objectives. The customer perspective, which appears at the top of our Quality Policy, forms the basis of our quality assurance.

*1 Good Manufacturing Practice: Manufacturing and quality assurance guidelines for pharmaceuticals.

*2 ISO 13485: An international standard for the establishment of quality management systems for the medical device industry.

Quality Policy

In order to deliver safety and reliability to healthcare fields, we shall

• pursue products valuable for our customers;

• understand our own roles in the quality system and practice them, and

• always review and improve our ways of doing business.

Terumo Corporation

FDA regulations—which have been strengthened in recent years—and emerging country regulations, which are tightening in response to accelerating global harmonization. We strive to continually improve our quality management system in anticipation of new trends and requirements.

Quality Management in the Factory


Terumo receives increasingly strict external audits

Respect for Bioethics

Strict Quality Control at Facilities Outside of Japan

Auditing System to Maintain High Quality

In developing and evaluating medical devices and pharmaceuticals, Terumo’s first concern is the dignity of life. In doing business, we comply with all relevant laws and ordinances, follow social norms, and give equal weight to science and ethics, as we have outlined in company rules.

Regarding the use of animals for R&D and product evaluations, the head of our animal experimentation group established the Animal Experimentation Committee, enabling us to supplement the 3R principles*, clearly specified in a 2005 revision of a Japanese law, with a fourth “R” standing for responsibility. The Animal Experimentation Committee undertakes employee education initiatives, examines experimentation plans, confirms that experiments were properly carried out and finished, and performs

As the role played by our factories outside of Japan increases in importance, we provide associates outside of Japan with the expertise we have cultivated in Japan for quality improvement. We also learn much about other perspectives regarding systematic approaches and standardization. As

To maintain and improve quality, we conduct internal audits to objectively evaluate whether our quality management system is being appropriately implemented and followed. The audits are conducted by associates who have been trained within the company to perform internal audits. The results are reported to our top management, who mandate measures by which we continually improve our quality management system. In addition, we undergo several external audits each year to verify our compliance with Japan's PMD Act (the Act on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics); U.S.

inspections to determine whether animals are being properly cared for to ensure responsibility in the use of animals in experimentation.

An evaluation performed by the Japan Health Sciences Foundation confirmed that our organizational approach to animal testing is in compliance with the basic guidelines for animal experimentation by organizations under the jurisdiction of the Japanese Ministry of Health, Labour and Welfare.

* 3R principles: First proposed by W. M. S. Russel and R. L. Burch in 1959, the three Rs—Replacement (switching to research approaches that do not use animals), Reduction (use of fewer animals), and Refinement (reduction of the pain felt by animals) —are principles for the ethical use of animals in experimentation. In Japan, the 3Rs were codified in the 2005 revision of the Act on Welfare and Management of Animals.

* Initial quality assessment is a system designed to reaffirm the quality and product specifications of new products, from the customer perspective, when shifting to mass production.

these exchanges increase, factories outside of Japan have also begun introducing Shoki Ryudo (initial quality assessment*), an evaluation method developed in Japan.

is a trademark of TERUMO CORPORATION.TERUMO, Misago, Ultimaster, Hiryu, Glidesheath Slender, CAPIOX, SURFLO, SURPLUG, NANOPASS, NICOPELIQ, HR Joint, MEDISAFE Fit Smile, TACSI, Acelio, and HeartSheet are registered trademarks of Terumo Corporation.Attendant Nexus is a trademark of Terumo Clinical Supply Co., Ltd. Spectra Optia is a registered trademark of Terumo BCT, Inc.Mirasol is a registered trademark of Terumo BCT Biotechnologies LLC.Scepter C is a registered trademark of MicroVention, Inc.

regulations, and those of Europe and other countries; and the requirements of corporate customers.


© Terumo Corporation December 2015Tokyo Opera City Tower, 3-20-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-1450, JapanTokyo Of�ce

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