Developing revolutionary drugs for diseases without effective treatment options

Takuro Wakabayashi
Chief Executive Officer, TMS Co., Ltd.

Developing revolutionary drugs for diseases without effective treatment options

TMS Co., Ltd. is a clinical-stage biotechnology company founded by scientists at the Tokyo University of Agriculture and Technology (TUAT), including Dr. Keiji Hasumi. While at TUAT, Dr. Keiji Hasumi had worked for 17 years with Dr. Akira Endo, who developed the first cholesterol-lowering statin drug. TMS has signed a major agreement with a global pharmaceutical firm—an unprecedented achievement for a Japanese biotech company. In November 2022, TMS made its long-awaited listing on the Tokyo Stock Exchange Growth Market.
CEO Takuro Wakabayashi talks about the company’s past activities and future outlook, as well its relationship with Mitsubishi UFJ Capital (MUCAP).

Background

—A ray of hope in the treatment of acute ischemic stroke

TMS was established in 2005 for the commercialization of a family of compounds called stachybotrys microspora triprenyl phenol (SMTP) discovered in microorganisms by TUAT scientists led by Dr. Keiji Hasumi, professor of the TUAT Fermentation Science Laboratory. Initial research efforts were concentrated on TMS-007, an SMTP compound. TMS-007, which dissolves blood clots and controls inflammation, is anticipated to be highly effective for treating acute ischemic strokes.
TMS stepped up its development activity after receiving funding from the Japan Science and Technology Agency (JST) in 2011. In 2018, the company entered into an assignment option agreement with Biogen, one of the biggest such agreement won by a university-originated clinical-stage biotech firm in Japan to date.
I joined Recruit Co., Ltd. after graduating from university and worked on new business development and venture investment. I was also involved as a legal team member in activities to help market university-developed technologies. Taking advantage of my experience in these areas, I left Recruit and then created a venture capital firm focused on startups originating in academia. TMS was one of our investments.
I became co-CEO of TMS in 2011. The company was in a tight financial position at the time, and I wanted to help, not just to protect our investment but also because I thought the company deserved to survive. Then, in 2018, I became a full-time CEO of TMS. I suppose it was fated to be, so to speak.

Encounter with Mitsubishi UFJ Capital

—Saved in a crisis by MUCAP's initial investment

I think a major turning point for TMS occurred in 2015, when MUCAP invested in us for the first time. We were in the midst of Phase I clinical trial at the time, but our grant from JST was about to run out. A new source of funding was absolutely necessary to complete our clinical trials.
The investment professional from MUCAP in charge of TMS at the time had known Dr. Hasumi from the start of TMS. He was apparently aware of the strong potential of TMS-007 from early on and was waiting for a good time to invest in us. And that happened to be in 2015. I am thankful that he made the decision, because it truly saved us. We did not have anyone else to turn to, because we were still in Phase I clinical trial and did not have the data to attract investors. In fact, I have heard that some people at MUCAP were skeptical of our potential. If we had not received MUCAP funding in 2015, I think TMS would not be what it is today.
MUCAP also helped us on the Biogen deal by introducing us to a business manager with knowledge of the US pharma and biotech sector, who then referred us to an attorney specializing in license negotiations. We did not know at the time that we needed someone who had expertise in licensing negotiations, and we certainly did not know who to contact for assistance in that area. So, if it had not been for MUCAP’s assistance, we probably would not have succeeded in our licensing negotiations as well.
Looking back, I can see that MUCAP has supported and advised us at critical points in our business development. We probably would not be where we are today if it had not been for them.

Relationship with Mitsubishi UFJ Capital

—Outstanding volume of information on biotechnology

MUCAP has a wealth of information about the biotech sector. Their Life Science team, which specializes in biotechnology, is made up of many former employees of pharmaceutical companies. My impression is that they have many “biotech mavens.”
Especially, Mr. Kakiuchi, the investment professional from MUCAP in charge of TMS keeps a close eye on conditions in the US biotech sector. I imagine there are not many people at venture capital firms in Japan who are as knowledgeable on the subject.
While we are a Japanese startup, we chose the global offering approach for our initial listing, preparing our prospectus in English and actively contacting investment funds and institutional investors abroad. To do this, we needed to gather information about stock brokerages with experience in biotech listings on NASDAQ, as well as information on the business activities of our competitors, namely biotech firms listed on NASDAQ. In this area as well, MUCAP’s assistance was a key factor. We were helped by them time and again, especially given their wealth of information and ability to act quickly.

Future Prospects

—Full steam ahead on developing new drugs and expanding the pipeline

We will now concentrate our R&D efforts on TMS-008 and TMS-009, next in the pipeline following TMS-007. TMS-008 has a powerful anti-inflammatory effect and is being studied for indications of acute kidney injury. At present there are no drugs approved for this treatment, so if TMS-008 can be commercialized, we think we can make a major contribution to society. TMS-009 is positioned as a backup for TMS-008, as it has a similar pharmacological activity as TMS-008 but a different chemical structure. Our aim is to add other drugs to the pipeline by initiating new research and partnering with academia.
I also hope TMS can work actively to help bring discoveries made by Japanese academia to the global market by capitalizing on the experience we have gained through our partnership with global pharmaceutical companies and our global IPO.

To all aspiring entrepreneurs

The biotech sector is unusual in that startups play a major—perhaps even a central—role in market growth.
A startup can take a university-discovered technology at a stage when major firms are not interested and develop it to a level where funding becomes available, thereby proving the technology’s potential and attracting the interest of a major firm to acquire it. Examples of such success stories in turn stimulate academic research, thus creating a beneficial cycle. Startups are the driving force of this cycle.
The biotech is inherently global in nature so you need to address the global market and institutional investors from the start. I hope all aspiring entrepreneurs tackle their jobs with pride.

Interviewed in August 2023

Company

TMS Co., Ltd.

https://www.tms-japan.co.jp/

Primary business activities

Research and development of drug products, quasi-drugs, (an official drug classification approved by Japanese MHLW for compounds with mild pharmacological activity), drug substances, medical devices, and medical commodities

Company History

2005	February	Founded in Shibuya-ku, Tokyo
2005	June	Relocated to Minato-ku, Tokyo
2007	August	Began reviewing feasibility of raw material production for TMS-007
2008	August	Relocated to Fuchu City, Tokyo
2011	June	Relocated to Inagi City, Tokyo
	October	Selected for funding from the Japan Science and Technology Agency (JST) under the “Adaptable and Seamless Technology Transfer Program through Target-driven R&D” (feasibility study stage, uncovering potential type, seed development subtype)
	November	Started IND-enabling study of TMS-007
2014	August	Commenced Phase I clinical trial of TMS-007 in Japan
2015	September	Selected for funding from the New Energy and Industrial Technology Development Organization (NEDO) under its program for promotion of research and development through university-industry matchmaking
2015	October	Completed Phase I clinical trial of TMS-007 in Japan
2017	May	Relocated to Fuchu City, Tokyo
2017	November	Commenced Phase IIa clinical trial of TMS-007 in Japan
2018	June	Option agreement with Biogen on TMS-007
2019	August	Commenced production of TMS-008 drug substance
2020	November	Completed selection of participants (90 patients) for Phase IIa clinical trial of TMS-007
2021	February	Started Good Laboratory Practice non-clinical studies for TMS-008
2021	May	Biogen exercised its option to acquire TMS-007. Rights to TMS-007 assigned to Biogen.
2021	August	Completed Phase IIa clinical trial of TMS-007 in Japan
2022	November	Listed on the Tokyo Stock Exchange Growth Market (Securities code:4891)

“Real Voices”