AstraZeneca x Osaka Innovation Hub
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Deep dive into Public-Private Partnership (PPP)!

Talk with AstraZeneca x Osaka Innovation Hub: Are Public-Private Partnerships (PPP) Key to Transforming Healthcare Market?

Innovation Infusion Japan or i2.JP is a healthcare innovation engine that actively promotes healthcare open innovation with the aim to realize a "patient-centric" business model. AstraZeneca. a pharmaceutical company founded the hub in November 2020. Having passed its first anniversary, it has grown into a community of over 145 companies and organizations (as of December 2021).

i2.JP has attracted a wide range of partners - mainly startups but also pharma companies, medical device manufacturers, tech companies, venture capitals and local governments. The partners offer unique strengths and resources in a number of projects to dive healthcare innovation.

TOMORUBA has been following the efforts made by i2.JP in a series of articles titled Challenges to Healthcare Innovation. In this fifth installment, we will focus on the collaboration between local governments and i2.JP. We welcomed two representatives (Nae Nakamura and Emi Ishitobi) from Osaka Innovation Hub (OIH), an innovation creation center established by the city of Osaka for a dialogue with Lei Liu of i2.JP to explore the potential of public-private partnerships in promoting healthcare innovation.

▲Ms. Megumi Ishitobi, Global Network Facilitator, Osaka Innovation Hub (OIH)
As a member of Osaka Business Development Agency, Ms. Ishitobi is tasked with facility management and business promotion at Osaka Innovation Hub. Her focus is on connecting with government agencies for information based on the strengths of Osaka Business Development Agency. She also has experience working in financial institutions.

Make it easier for startups to take on a challenge - Trigger for our collaboration

――First, could you tell us about what you do at Osaka Innovation Hub?

Ms. Megumi Ishitobi, Osaka Innovation Hub (Ishitobi):Osaka Innovation Hub (OIH) was established by the city of Osaka in April 2013. It was opened with the idea of creating a gathering place for entrepreneurs in the heart of Osaka. It is managed by us, Osaka Business Development Agency. Our job is to connect startups to the right people at the right time, bridging to large corporations, venture capitals, financial institutions, universities, and government agencies.

OIH offers two types of membership programs - Partner and Player. Players are so-called startups and entrepreneurs. The number of Players has grown to about 1,000. On the other hand, Partners are companies and organizations offering support for startups. As many as 400 companies and organizations including large corporations, media, and universities are participating as Partners.

――What are your goals at OIH?

Ishitobi: The main job at OIH is to provide support for startups, but we set three key goals for ourselves. The first is funding. The second is business tie-ups with large corporations. The third is new product launches. We organize seminars and events and deliver news so that startups can realize these goals.

――OIH has been a partner to i2.JP since its inception. How did you come to meet each other?

Ms. Nae Nakamura, Osaka Innovation Hub (Nakamura):Around September last year, AstraZeneca shared the news that i2.JP was going to be launched. As I listened to the details, I felt that the platform was a good match for OIH, and we decided to join.

Lei Liu, AstraZeneca K.K.(Liu):You are right. There was a high level of affinity between what we do and what OIH does, so we hit it off right away when we met. And it was easy to kickstart after that.

▲Ms. Nae Nakamura, Director, Innovation Promotion Department, Osaka Innovation Hub (OIH)
As a member of Osaka Business Development Agency, Ms. Nakamura is tasked with facility management and business promotion at Osaka Innovation Hub. Having experienced overseas business operation in her previous job, she also places focus on international collaboration.

――What did you expect from i2.JP when you joined?

Nakamura:We had heard a lot of different voices from healthcare startups. For example, some said that it was difficult for a startup to advance business on its own because of the obstacles to entering healthcare space, or others said that they did not how to work with large companies.

i2.JP has expanded its network beyond AstraZeneca and reached other companies in the healthcare and health industries, so I expected that OIH's participation in i2.JP would give better access for startups to various challenges.

How does "public-private partnership" work in supporting startups?

――OIH is familiar with ecosystems in the Kansai region. I would like to specifically ask about challenges, PPP trends and market shift in the healthcare domain in Kansai. What are your thoughts on these?

Nakamura:One of the characteristics of the Keihanshin area is that there are many national, public and private universities and many pharmaceutical companies in Kobe and Osaka. This regional feature lays the ground for entrepreneurship in life science, with many working on development of medical devices and health promotion schemes.

In addition, there is an increasing number of efforts for commercializing seeds from academic research and linking them to social implementation. In some cases, researchers themselves start their own businesses, while in other cases, someone other than researchers aim to commercialize research seeds. These are the trends in the healthcare field in the Kansai area.

In addition, the Keihanshin area was recognized as a Global Hub City by the Cabinet Office in July last year. Here, too, the focus was on life science. The plan was created to apply focus on creation and development of startups. Since OIH is also part of this project, collaboration with universities and special programs for student entrepreneurs in life science are being offered to connect them with businesses.

――What are the characteristics of the universities producing startups in life science?

Nakamura:ome startups have been selected to join J-Startup KANSAI, the Kansai version of J-Startup. Looking at the list of new startups selected in the previous and current editions, I see many startups in biotechnology and life science from national universities.

Since there are many universities and research institutes in the Keihanshin area that are strong in biotechnology and life science related fields, we expect a similar influx of startups from universities in the area.

――What do you think are the issues facing healthcare startups? What are the clues to solving them?

Ishitobi: Japanese healthcare industry is heavily regulated. Startups are taking on the challenge of developing new technologies without precedents, so they are struggling to find out how to keep speed. In such cases, the key is to support them in cooperation with pharmaceutical companies and other large corporations, as well as national and local governments.

For example, AstraZeneca has open innovation hubs overseas, so they can help startups access overseas markets. Also, national and local governments have agreements in place with municipalities globally, so they can refer them to the municipalities that have been accepting Japanese startups. I think collaboration is important in supporting startups and helping them move forward.

――OIH has close relationships with governments. Do you project there will be more actions in line with deregulation?

Nakamura:In the case of projects owned by national and local governments, there can be room for deregulation to accommodate some parts of the proposals made by academia and private sector. OIH regularly accepts visitors from government agencies. So, we try to exchange our views and keep them abreast of what is happening in the front lines.

Liu:I think that the Super City initiative*, for which Osaka Prefecture and the City of Osaka completed submissions, will be a good starting point. If Osaka is selected, we can partially ease regulations within the Super City framework and undertake new challenges on a project-by-project basis. I believe that such a move is likely to emerge in the future.*Super City…A joint effort by local communities, businesses, and national government to realize an "entirely futuristic city”.

▲Lei Liu, Director, Innovation Partnerships & i2.JP, Commercial Excellence, AstraZeneca K.K.
Joined GE Healthcare Japan as a new graduate. Engaged in medical devices R&D and joint research with universities. Moved to the Japan Research Institute Ltd., where he was in charge of organizing and promoting a consortium on the themes of autonomous driving and frailty. After working for startups and a life insurance company, he joined AstraZeneca K.K. in January 2020. Since then, he has led the launch and operation of i2.JP.

――Mr. Liu, I would also like to ask you about the key points of PPP in the context of support for startups.

Liu:I would like to talk about our roles in the context of startup growth curve. As you know, incubation in the healthcare domain takes time. For drug discovery, it takes 10 years, and for solutions, it takes about 2 to 3 years before commercialization. What works particularly well at the initial phase is support from semi-government entities such as OIH.

On the other hand, it is unrealistic to expect the semi-governments to stay alongside forever when seeds start to grow bigger. This is because as startups grow, they need more fund. I believe that VCs and major private companies are the ones who can and must supply resources against the "valleys of people, goods, and money". I wouldn’t say AstraZeneca’s response has been perfect. Rather we see our role in the future as being one as a guide runner, connecting startups to the hubs overseas and opening access to test fields when they begin to mature.

Two success stories born out of collaboration between OIH and i2.JP

――Are there any examples of successful collaboration between the two, resulting in enhanced support for startups?

Ishitobi:Yes, I would like to share two examples. First example is the HEALTHCARE X DIGITAL global pitch event, which was hosted by the American Chamber of Commerce in Japan in 2020. i2.JP was a Contributing Sponsor of the event. OIH introduced a startup to join in the event, which resulted in business advancement of the startup.

We had been aware that many pharma companies were scheduled to attend as sponsors. So, OIH informed the member startups that this was a fascinating opportunity and encouraged them to send their applications for the event. A couple of the member startups did and one of them (Bisu, Inc.) won the "Best Innovation Award" and "Audience Moonshot Award" in the pitch competition. The company is now in talks with AstraZeneca.

I've heard that the first step is the most difficult for startups as they start out collaboration with various companies and build a track record. It would be our honor if we had been a part of the first breakthrough for the startups.

Liu:We think it's important to support pitch events and increase exposure for startups. It would be a shame if startups with excellent technologies are short of growth for a lack of exposure and matching opportunities. It is this idea that drives us to promote pitch events.

――Has AstraZeneca started some form of co-creation projects with Bisu, the grand prize winner of the competition?

Liu:Bisu is a start-up that rolled out a simple at-home urine test kit. Thinking that there is a deep affinity with cardiovascular diseases, we set up one-on-one meetings with our Medical Team and Commercial Business Units in and out of Japan as well as R&D team.

We did not immediately jump to business modeling. Rather, we are having further discussions to set a milestone a little further down the road, in line with Bisu’s growth trajectory. To our delight, Bisu has since raised funds and is steadily achieving milestones. I believe that the time when Bisu and we can start collaborating is not far off.

――Please tell us about the second example.

Ishitobi:OIH regularly hosts a global pitch event called GET IN THE RING OSAKA. While focusing on the competitive nature of the event, with the support of our partners, we also make it a place for advertisement for startups aiming for global expansion. At the same time, we aim to construct collaboration between startups and our partners.

AstraZeneca is also a partner of this event, so we introduced an AI company (I’mbesideyou) when we held the event last year. Subsequently, AstraZeneca internally conducted a proof of concept using the I’mbesideyou solution. We are happy to learn that the project moved to the full implementation phase. So, that is the second example.

Liu:While patient centricity is a top priority for i2.JP, we are also exploring ways to contribute to solving internal issues. I’mbesideyou is the latter. With the pandemic, AstraZeneca was forced into a full remote mode albeit temporarily. This experience revealed the issue of lack of communication between staff members.

I’mbesideyou owns the solution for analyzing emotions based on the images and voice data gathered when we communicate on video conferencing systems. I got in touch with the relevant internal stakeholders, thinking that it would make a great solution to our internal issue. To our delight, it is now moving towards official implementation.

――This is a question for OIH. What do you like about your collaboration with AstraZeneca?

Nakamura:It's the speed. We are very grateful that AstraZeneca is quick to action when we introduce someone. I would say many companies producing success stories tend to have contact persons who are quick to action.

Ishitobi:I agree with you. When the contact person is active, energetic and quick to engage with internal stakeholders, what appeared irrelevant at a first lock can develop into a major project.

When the open innovation team are innovators themselves and have the ambition to "create something new within the company" or "introduce a small but innovative service to the world," the process will go smoothly. Since Mr. Liu and Mr. Obayashi, the contact persons for i2.JP, are innovator types themselves, they have been a tremendous help.

――From the other way around, what part of OIH do you think is attractive from your point of view, Mr. Liu?

Liu:OIH is like a good translator who can speak the languages of large companies, startups, and public sector. It's wonderful that they can create just the right level of harmony. The fact that they are passionate people speaking different languages yet with the same goal in mind, makes them great partners for us. We are looking forward to deepening our relationship.

The keywords for further success are "Expo 2025" and "social implementation”

――What are your prospects for future?

Nakamura:The World Exposition is going to be a major theme for Kansai. Osaka Business Development Agency is also involved in the efforts for Expo 2025. We hope to work with i2.JP members including AstraZeneca so that we can jointly develop startup projects that can be part of the widely publicized “Osaka Living Laboratory Program”. Additionally, we would love to work on creating new business together keeping in mind what to come before and after Expo 2025, not just during the event.

――Mr. Liu, what are your prospects for future?

Liu: I also believe the two keywords will be "Expo 2025" and "social implementation”. We don't have anything definite to share with you about Expo 2025, but we are considering it as one of the milestones of i2.JP activities.

Also, i2.JP is now in its second year. We are now more strongly aware of "social implementation”. There are already a number of PoCs underway, and the number of business matches is increasing. However, there are many PoCs that came up short. Since we are working on creation of new business, it is natural that the survival rate will be low, so we have to increase the number of at-bats, which is our focus for next year. We need more encounters to make it happen. I would like to work together with OIH to amplify opportunities for meeting and to deliver PoCs and speed social implementation. Co-creation is not limited to one-on-one projects between a large company and a startup. It can be done between a group of large companies and a group of startups. Including those programs, we would like to create and implement ideas together in the field in Osaka.

――I see Osaka is getting exciting. For my last question, what kind of partners would you like to see in i2.JP for revitalizing the healthcare industry?

Ishitobi:Since there are many pharmaceutical companies in Kansai, I hope that Kansai-based pharmaceutical companies will join. We can learn from successful precedents and work together to invigorate the healthcare domain. Also, if hospitals and pharmacies join i2.JP, they can help startups find the right business partners.

――What is your opinion, Mr. Liu?

Liu:Right now, i2.JP membership portfolio is growing steadily. We are 60% startups and 6 major companies have joined from the pharmaceutical industry alone. The member count from medical device manufacturers, tech companies, and financial sector is also on the rise. However, we need more actions to engage with hospitals and academia.

Looking at AstraZeneca globally, there have been successful, strategic partnerships with local hospitals. They serve as a product launch pad for startups. Hospitals also gain benefits. They are very aggressive. For example, they acquire patents or invest in the startups. So, I would like to build such an ecosystem in Japan as well.

Postscript

What was interesting was the division of roles between the public and private sectors at pace with startup growth curve. Local governments support the seed phase and hand over to the private sector when a startup is mature. I believe this process can be used in any field, not just in the healthcare industry. As far as Osaka is concerned, World Expo 2025 is the most important event for the region. It will be interesting to see how the huge event can evolve into a breeding ground for healthcare innovation in Osaka, through PPP and engagement with academia.

If you are interested in working together to realize patient centricity, please contact us.(Edited by Yukitake Sanada, Written by Wakako Hayashi)

カニッシュ・トーステン(Torsten Kanisch)
Megumi Ishitobi
Global Network Facilitator, Osaka Innovation Hub (OIH)

As a member of Osaka Business Development Agency, Ms. Ishitobi is tasked with facility management and business promotion at Osaka Innovation Hub. Her focus is on connecting with government agencies for information based on the strengths of Osaka Business Development Agency. She also has experience working in financial institutions.

カニッシュ・トーステン(Torsten Kanisch)
Nae Nakamura
Director, Innovation Promotion Department, Osaka Innovation Hub (OIH)

As a member of Osaka Business Development Agency, Ms. Nakamura is tasked with facility management and business promotion at Osaka Innovation Hub. Having experienced overseas business operation in her previous job, she also places focus on international collaboration.

カニッシュ・トーステン(Torsten Kanisch)
Lei Liu
Innovation Partnerships & i2.JP, Commercial Excellence, AstraZeneca K.K.

Joined GE Healthcare Japan as a new graduate. Engaged in medical devices R&D and joint research with universities. Moved to the Japan Research Institute Ltd., where he was in charge of organizing and promoting a consortium on the themes of autonomous driving and frailty. After working for startups and a life insurance company, he joined AstraZeneca K.K. in January 2020. Since then, he has led the launch and operation of i2.JP.

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