Tetsuro Fujita, emeritus professor at Kyoto University a poses for a photograph in Kyoto, Japan. Photographer: Tetsuya Yamada/Bloomberg

The Cordyceps fungus known in Chinese and Japanese as “winter insect, summer plant,”is seen in Tokyo.

A packet of Novartis AG’s multiple sclerosis drug, Gilenya, is seen in this undated handout photograph. Source: Novartis AG via Bloomberg

Tetsuro Fujita’s eureka moment abouta Himalayan fungus in 1985 may mean part of a $5 billion payoutfor Mitsubishi Tanabe Pharma Corp. a quarter-century later.

While the scientist drove over a bridge between Japan’sShikoku and Honshu islands on his way to take up a research postfor traditional herbal remedies, Fujita realized the fungus,used in a Chinese medicinal soup, must be suppressing the immunesystem of the insects on which it grew.

His research at Kyoto University not only helped yieldGilenya, a new treatment for multiple sclerosis — thedebilitating condition afflicting more than 2 million peopleworldwide — it also promises to bring Mitsubishi Tanabe itsbiggest money earner. Annual sales of the pill, the first forthe autoimmune disease, may exceed $5 billion, UBS AG said.

“Little did I think that it would be a treatment formultiple sclerosis,” Fujita, 80, said in an in interview Kyoto.“I was more interested in immune suppression for organtransplants. I knew nothing about the disease back then.”

Novartis AG, based in Basel, Switzerland, began sellingGilenya in the U.S. in October. Projected sales of the medicinewould rank it among the 10 best-selling drugs worldwide, basedon data from IMS Health inc., a Norwalk, Connecticut-basedresearch company.

Mitsubishi Tanabe will probably book royalties equivalentto 10 percent of sales, based on the median of four analystestimates in a Bloomberg News survey.

Better than Expected

Kazuko Hamada, a spokeswoman for Mitsubishi Tanabe,declined to comment on the royalty payments that the Osaka,Japan-based drugmaker will receive. Novartis spokesman Eric Althoff also declined to comment on the royalties.

Gilenya’s fourth-quarter sales of $13 million were aboveexpectations, Dhavalkumar Patel, who heads Novartis’s autoimmuneresearch, said last week.

“Novartis says 2,000 people are already using the drug inthree months,” Kenji Masuzoe, an analyst at Deutsche Bank AG inTokyo, said by telephone on Jan. 28. “That’s great progress asI’ve been expecting 10,000 people by the end of this year, whichwill mean sales of about $350 million.”

Multiple sclerosis causes the immune system to attack themyelin sheath, which surrounds and protects nerve cells, leadingto symptoms including numbness, difficulty in coordination and memory loss, according to Medline Plus, a website of the U.S.National Institutes of Health. in its severest form, it canshorten life and, in rare cases, lead to death, according to theU.S. National Multiple Sclerosis Society’s website.

Mitsubishi Tanabe rose 2.1 percent to 1,369 yen at the 3p.m. close of Tokyo trading. the stock gained 18 percent lastyear, outperforming Japan’s benchmark Topix index, which fell 1percent.

Sales at the Japanese company declined 2.4 percent in the12 months ended March 2010, the worst performance in five years,to 404.7 billion yen ($5 billion), according to data compiled byBloomberg.

Annual sales of Gilenya may peak at $5.3 billion in 2018,Fabian Wenner, an analyst at UBS in Zurich, said Feb. 1.

Gilenya is approved for the relapsing-remitting form ofmultiple sclerosis, the most common type, and competes withinjected drugs on the market including Biogen Idec inc.’s Avonexand Teva Pharmaceutical Industries Ltd.’s Copaxone.

The Novartis drug cut relapses by more than half comparedwith Avonex, an injected therapy from U.S. drugmaker Biogen IdecInc., according to a patient study published in the new EnglandJournal of Medicine last year.

Gilenya gained the support of a European medical committeein January, and a European Commission decision on approval maycome in about three months. It’s also being reviewed byregulators in Japan.

In the U.S., the drug is priced at $4,000 for a monthlyprescription. That’s 66 percent more than the $2,414.99 for apre-filled syringe of 30 micrograms per milliliter of Avonex, amonth’s supply, according to PharmacyChecker.com. Analystsincluding UBS’s Wenner expect Gilenya to be cheaper in Europe.

Current medicines require patients to inject themselvesevery other day or once a week, Kyoko Nakata, the Tokyo-basedchairman of Japan’s MS Cabin, a support group for the condition,said in an e-mail.

“They are shots, so during the course of treatment, theyare a constant reminder to patients of their condition,” saidNakata, who was diagnosed with multiple sclerosis in 1993 andhas been taking Bayer AG’s Betaferon since 2000. “Gilenya wouldmake it easier to treat the disease as it saves time and bringspatients closer to having a normal life.”

With the help of another researcher, Fujita partnered withYoshitomi Pharmaceutical Industries Ltd. and Taito Co., nowrespectively part of Mitsubishi Tanabe and Mitsui Sugar Co. Thescientists began studying in 1986 the Cordyceps fungus known inChinese and Japanese as “winter insect, summer plant,” socalled because it invades insect larva during winter and growsout of the host by summer.

Fujita said he was inspired by the discovery ofciclosporin, also derived from a fungus, which spurred researchinto how the immune system may be subdued in transplantpatients. Fujita, now a professor emeritus at Kyoto University,said he was unaware the immune-modulating properties ofCordyceps could eventually help multiple sclerosis patients.

“I knew from reading the Chinese medicinal encyclopediathat the fungus feeds off the larva, lives in a symbioticrelationship for a year, and comes out of the ground in summerby growing out of the carcass,” he said. “That made me thinkthe fungus must be suppressing the larva’s immune response.”

Used as an herbal remedy for centuries, the fungus containsan insoluble, toxic compound called myriocin, said Kenji Chiba,who worked on the project at Yoshitomi. it took scientists atleast three more years before they could modify the compoundinto a usable form, creating fingolimod, or Gilenya.

Novartis licensed the overseas rights to fingolimod fromMitsubishi Tanabe in 1997.

“Although it took a quarter of a century, I’m happy it’sbecome a drug while I’m still alive,” Fujita said. “It makesme happy that something I did is making others happy.”

To contact the reporter on this story:Kanoko Matsuyama in Tokyo at

To contact the editor responsible for this story:Jason Gale at