Shionogi/Purdue Strategic Discovery Alliance With Synchronicity And Serendipity—Case Study Of Open Innovation

Eiichi Yamaguchi
Shionogi & Co., Ltd., Head of Licensing, General Manager, Osaka, Japan

The utilization of open innovation (Chesbrough, 20041) for two companies will affect the long-term corporate strategies at both companies. Even prior to the term “open innovation,” Shionogi & Co., Ltd. licensed MS Contin® & OxyContin®, from Mundipharma K.K., the Japanese affiliate of Purdue Pharma L.P. and developed a cancer pain market which did not exist in the mid-1980’s in Japan. Due to the sales growth of MS Contin® & OxyContin®, Shionogi designated “Pain” as one of three R&D core therapeutic areas in their 2nd medium term business management plan in 2005. Shionogi chose an alliance strategy which has a synergistic effect and complementary one, rather than exploring closed innovation, so that the discovery alliance with Purdue was initiated in late 2005. While Shionogi was on the pioneering side of open innovation, Purdue’s business conditions in 2004 and 2005 suited seeking a strategic partner to share the risk for their Discovery Research. Alliance health surveys are conducted annually between Purdue and Shionogi. The results reinforce a strong, healthy alliance. There is ”synchronicity” and “serendipity” noted retrospectively related to the Discovery alliance between Purdue and Shionogi further reinforcing the benefits of open innovation.

Open innovation: “Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. [This paradigm] assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology.”

Henry Chesbrough


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