A Role Model of Large-Scale University–industry Collaboration in Japan: The Case of Chugai Pharmaceutical and Osaka University

: Large-scale university–industry collaborations that are worth some 10 billion yen and run for 10 years have begun to appear in Japan since the mid-2010s. This paper focuses on the drug development project being conducted by Chugai Pharmaceutical Co, Ltd. and Osaka University, which is a pioneering case of this kind of collaboration, and explores the background of how this project came to be. For the companies involved in university–industry collaborations, the most important point for consideration is generally whether or not they will achieve results (from the university’s contributions) that are sufficient to justify their investment. For Chugai Pharmaceutical, the deciding factor in making its 10-billion-yen investment was that Osaka University had been selected for the World Premier International Research Center Initiative (WPI) of the of Education, Culture, Sports, Science and Technology (MEXT) and had built up research capabilities to make a sufficient contribution to Chugai. In that sense, we could say that this collaboration came into being because of the government’s support in building the innovation base and because of switching over from government sponsorship to corporate sponsorship after the operation of the base was on track. This so-called government-support-based, large-scale university–industry collaboration is a potential role model for university–industry collaborations in the future.


Introduction
Since open innovation (Chesbrough, 2003(Chesbrough, , 2006 became popular in Japan in the 2010s, university-industry collaboration has been focused on as a way for firms to obtain external resources (Kuwashima, 2018(Kuwashima, , 2019Manabe & Yasumoto, 2010;Nagahira, 2010). 1  By its nature, research and development takes a long time to yield results. Therefore, when firms and universities conduct joint research, it is best to do it over the long term. However, because firms and universities have different goals and motivations in collaborating, there is concern that opportunistic behavior and problems between the organizations will occur (Azoulay, Ding, & Stuart, 2009;Baba & Goto, 2007). So, entering into large-scale contracts is very risky for companies funding universities. Therefore, the conventional university-industry collaborations in Japan were often short-term and small-scale contracts. On the other hand, in recent years, a large-scale university-industry collaboration contract with a total cost of 10 billion yen for 10 years has appeared. This paper focuses on the drug development project undertaken by Chugai Pharmaceutical Co., Ltd. and Osaka University, which is a pioneering case of this kind of collaboration. In 2019, this project, which was lauded for its social impact and sustainability, 2 received the Minister of Education, Culture, Sports, Science and Technology Award at the 1st Japan Open Innovation Prize (JOIP) sponsored by the Cabinet Office with the theme, "University-industry co-creation from the basic research stage: Collaboration between organizations." 3 Let's use this case study to look into why large-scale university-industry collaboration, which had formerly not taken place, has become possible. When conducting joint research, the joint research contract (separate from the comprehensive collaboration agreement) is signed 10 In other words, Chugai Pharmaceutical has the right of first access to these research outcomes. 11 Instead of engaging in joint research, Chugai Pharmaceutical can also apply to IFReC for the right to use the patent resulting from the basic research. See Kishi and Takahashi (2010), Nakano and Takahashi (2012), and Takahashi and Nakano (2003)  The expectation is that using this scheme for the collaboration will enable a smooth link between the basic research stage and the applied research/development stage of the drug development process, thereby increasing the potential for creating new drugs.

Overview of the Collaboration of Chugai
Since it typically takes at least 10 years to develop a new drug, this collaboration has yet to produce any new products. However, as of

Factors for Forming Large-Scale University-industry Collaboration
In this section, we consider the factors that have made it possible to engage in large-scale university-industry collaboration in Japan, when it had formerly not taken place. Research and development projects, including those for pharmaceutical products discussed in this paper, generally take a long time to achieve results. 15 Thus, it is a given that joint research conducted by firms and universities should ideally take place over a long period of time. However, the motivations and goals of the stakeholders (firms and universities) participating in university-industry collaborations are not necessarily aligned (Azoulay et al., 2009;Baba & Goto, 2007;Lee, 2000;Rosenberg & Nelson, 1994). For example, firms are most interested in launching new products onto the market as a result of the collaboration, while universities tend to be more interested in such matters as securing research independence and writing academic papers than in launching new commercial ventures. There is also the issue that it is difficult for firms to get an accurate picture of universities' research capabilities ahead of time. This makes it difficult for firms providing research funding to universities to make large investments before they can be sure that they will get a return that is in line with the investment they are making. This is why most university-industry collaborations in Japan have consisted of small-scale agreements in the past. So, how have Chugai Pharmaceutical and Osaka University been able to carry out such a large-scale collaboration? Below, we examine the viewpoints of both Chugai Pharmaceutical and Osaka University (IFReC).
Let us first examine how Chugai Pharmaceutical came to the decision that it would be able to obtain a return that is in line with its investment. The major factor is the IFReC's impressive research capabilities built up prior to its collaboration with Chugai Pharmaceutical. As mentioned above, it has been 10 years since the At the same time, from the university's point of view, one of the biggest issues in collaborating with a firm from the basic research stage over a long time period was the potential loss of its basic research independence or academic freedom (Azoulay et al., 2009;Krimsky, 2003;Washburn, 2005). Even in this collaboration, the 16 From an interview conducted in March 2018.

maintenance of its research independence was a key issue for Osaka
University. 17 This issue was resolved in the first item in the collaboration's basic scheme: "IFReC researchers will continue academic basic research without restriction." In typical university-industry collaborations, the use of the funds provided by the firm are usually restricted, but in this collaboration project, Chugai Pharmaceutical has not only given the IFReC 1 billion yen per year but has not designated how the funds are to be used. Thus, we see that from a funding perspective, the independence of the IFReC's research activities is being preserved.
Besides the store of organizational research capabilities and the maintenance of research independence, another key issue in realizing this collaboration is the close communication between the IFReC and Chugai Pharmaceutical at an organizational level. As noted above, Chugai Pharmaceutical has assigned more than 10 researchers to the IFReC's Collaboration Promotion Laboratory, cultivating a climate where researchers from Chugai Pharmaceutical and the IFReC can hold both formal and informal meetings on a daily basis. Also, a large-scale research symposium is held every six 17 In a news release on the collaboration between Osaka University and Chugai Pharmaceutical, IFReC Director Shizuo Akira stated, "Going forward, we plan to continue advancing our research based on the concept of researcher independence…" (Osaka University & Chugai Pharmaceutical, 2016). Also, in the Osaka University newsletter, Osaka University President Shojiro Nishio commented, "These funds being received by Osaka University will be earmarked mainly for operating expenses at our Immunology Frontier Research Center (IFReC). In doing so, we will be able to maintain an academic environment where researchers can concentrate on conducting independent basic research in advanced epidemiology" (Osaka University, 2017). Likewise, at the award ceremony for the 1st Japan Open Innovation Prize, Osaka University Executive Vice President Yasushi Yagi stated, "The use of this research funding has not been pre-allocated, so we will freely engage in research by using the funds to pay our researchers." (Osaka University, 2019). These comments show that maintaining research independence is a key issue for the IFReC in this collaboration.