Hitachi Poised for Major Revenue Growth Spurt in Life Science Sector, Executive Says

Less than one year ago, Japanese electronics giant Hitachi inaugurated its life sciences division, marking the company’s foray into the growing genomics industry.

Since then, Hitachi has forged development and distribution deals with Applied Biosystems (formerly PE Biosystems) and DoubleTwist and has also become a buyer of such technologies as Myriad’s ProNet system for studying protein-protein interactions.

Recently, Hitachi Instruments Service, another Hitachi subsidiary, and Nanogen announced plans to jointly invest at least $57 million over the next 10 years to develop instruments for DNA analysis based on Nanogen’s chip technology.

BioInform recently talked with Takao Iwayanagi, chief technology officer at Hitachi’s life sciences group, in Japan about his massive growth plans as well as Hitachi’s efforts to become a leading player in the genomics sector.

BioInform: What are the life science division’s main areas of focus and what are your main products?

Iwayanagi: Our service menu is not limited to bioinformatics. The areas of focus are bioinform-atics, genomics, and proteomics. The current service menu includes high-throughput sequencing, SNP scanning and scoring, expression profiling, protein-network-analysis services, and bioinformatics.

We are trying to serve pharmaceutical companies and agri-bio companies with instrumentation, measurement, and information processing.

BioInform: How big is Hitachi’s bioinformatics division currently in terms of people and revenues?

Iwayanagi: There are 60 members, including affiliates. The expected revenue for this fiscal year is 800 million yen ($7.3 million). The expected revenue for the 2002 fiscal year is 15 billion yen.

BioInform: Where do you sell your tools and services?

Iwayanagi: Right now, our activity is limited to Japan. Hopefully, we will expand to Asia and the Pacific. We are in negotiations to sell some database software to South Korea.  

BioInform: What services do you provide?

Iwayanagi: Our services combine measurement and information software and our products include databases and software for bioinformatics services. We accept samples, and then we return the measurement results to the companies using bioinformatics tools.

BioInform: Do you develop specific tools for specific jobs?

Iwayanagi: We have a separate instrumentation group that provides us with some measure-ment tools. Also, we buy some measurement tools from other companies. Our business is not the development or selling of the instruments. We provide services.

BioInform: You co-developed sequencers with Applied Biosystems. Are you working with them to develop the next generation of sequencers?

Iwayanagi: Hitachi’s instruments group collaborates with Applied Biosystems in this arena. The 3700 is a 96 capillary. The new machine is 16 capillary. The 3700 is used in large sequencing facilities, like Celera and Sanger Center. The new machine is designed for a small scale of sequencing. The new machine is already on the market. It has different protocols besides sequencing. We have not yet determined how we will use it.

BioInform:  Why did you select Myriad’s technology and ProNet facility for studying protein-protein interactions?

Iwayanagi: The reason why we picked Myriad is that their ProNet is the industrial (massively parallel) yeast two-hybrid technology. It’s one of the most advanced technologies, in our view, and only one company does such technology in terms of industrial scale.  The technology becomes very powerful to elucidate protein-protein interaction.

BioInform: You have a $1 million collaboration with DoubleTwist. What does that entail?

Iwayanagi: They are an application service provider in the biotechnology field and we are now getting the right to sell their product — software and database — in Asia and the Pacific region. Executives from DoubleTwist and Hitachi will demonstrate the software and database [the week of August 7] in Tokyo and Tsukuba.

BioInform: Are you considering other such deals?

Iwayanagi: For the other technology we are now considering, we cannot disclose our plan.

BioInform: Are you going to get into gene targeting and drug discovery?

Iwayanagi: Gene targeting, yes. Drug discovery, no, not for the time being.

BioInform:  The Japanese government is increasing its support of genomics. How does this affect Hitachi’s bioinformatics business?

Iwayanagi: Government support — chiefly from the Ministry of International Trade and Industry — tremendously helped us establish the life science group. Support from agencies and from the Science and Technology (Ministry) goes to universities or public research laboratories. But MITI, the Ministry of Health and Welfare, or the Ministry of Agriculture, Forestry, and Fisheries provide research funds to the private sector also.

BioInform: How much government funding did you get last year?

Iwayanagi: Last year we got $9 million from MITI. Of course, Hitachi itself invested to establish the life sciences group.

Iwayanagi: We are not sure. We are now applying.

—Sandra Katzman