The initial European approval allowed Cytori to expand into Japan where, Dr. Hedrick noted, the company obtained its first clinical experience. The company capitalized on the fact that doctors in Japan can, with a prescription, import technologies approved elsewhere.
“And it just so happened that we had a relationship with one of the preeminent surgeons in Japan. In fact, our first 20 patients had breast cancer reconstructions performed in Japan at his university hospital,” Dr. Hedrick recalled.
“At the same time, we identified someone to lead the charge in Japan, that we were very fortunate to get, who was also a business leader at Baxter in Japan. One thing led to another, and we now have the majority of our revenues from Japan. It was all tied back to that original regulatory approval in Europe that allowed us to get into that market very quickly,” Dr. Hedrick added.
Japan’s share of Cytori’s sales tumbled during the first quarter to 30% from 72% a year earlier due to the March 11 Tohoku earthquake and resulting tsunami. Japan is where Cytori, which maintains a Tokyo office, found two investors among some of the country’s corporate giants.
Last year Astellas agreed to buy $10 million of Cytori stock, and in 2008, Olympus, a medical device company, led a $17 million private placement financing. Two years prior, Olympus made an $11 million milestone payment to Cytori for obtaining CE Mark approval for the original Celution system.
“They provided a significant amount of capital to Cytori, and that was another reason why it made sense to focus on the Japanese market,” Dr. Hedrick said.