Rakuten Medical Bets 95% of Its Resources on U.S. Cancer Market

Rakuten Medical is pouring about 95% of the company's resources into cracking the U.S. market, with a 2028 FDA submission as the target. The San Diego-headquartered biotech offshoot of Japanese tech conglomerate Rakuten already treats head and neck cancers in Japan with its photoimmunotherapy. Now it's running Phase 3 clinical trials in the U.S.

CEO Minami Maeda frames the pitch bluntly. "We're essentially asking surgeons to put down their knives, and pick up this lightsaber," he tells Fortune, referring to the light-based technology. The choice of market is deliberate. "The U.S. is the world's biggest market, and it's also where a lot of capital is deployed," Maeda says. "We want to be able to treat all solid tumors, rather than stop at just head and neck cancers—that means we need significant capital to be invested into R&D."

How the 'lightsaber' actually works

The core technology came about by accident. In 2011, Japanese scientist Hisataka Kobayashi and his team at the U.S. National Cancer Institute stumbled onto its therapeutic potential. "Kobayashi was trying to use photoimmunotherapy to visualize cancer cells… it wasn't for treatment," Maeda explains. "But when they were doing an experiment, they realized that cancers were disappearing, and eventually attempted to use it for therapeutic reasons."

Today the company sells two pieces. One is a proprietary cancer drug, Akalux. The other is the Alluminox platform used to administer the therapy. The mechanism: Akalux binds to the epidermal growth factor receptor on cancer cells and tags them with a light-activated dye. Red light then selectively kills the tagged cells.

Maeda says the selectivity is the point — a minimally invasive treatment that preserves patients' quality of life. "In 10 years' time, I hope everybody believes that this technology could be the fifth pillar of cancer treatment, aside from surgery, radiation, chemotherapy and immunotherapy," he says.

What does the business model change for hospitals?

Adoption didn't come fast. Doctors didn't refuse the drug-device combination, but they hesitated. "It's not a refusal; it's a challenge for the doctors to understand: why am I not going to do surgery?" Maeda says.

The numbers show the learning curve. Rakuten Medical treated just 30 patients in its first year in Japan. It now treats roughly 700 to 800 a year — a more than twentyfold increase — across some 200 hospitals.

To overcome that inertia, the company uses a razors-and-blades model. It installs the Alluminox platform in hospitals free of charge and takes only a minimal fee per use. Profits come mostly from sales of the Akalux drug. "If your company sells both printers and ink, you can't sell both at very high prices, since the printer is an enabler," Maeda says.

The economics split along geographic lines. Maeda says the Japan branch is already profitable. The global entity operates at a loss because of high research spending — the gap U.S. capital is meant to close.

A side door into China

The U.S. push won't be the only near-term move. Maeda wants to enter markets that acknowledge Japanese regulatory approval of Akalux — Taiwan, Macau, Singapore, Hong Kong and Saudi Arabia. That lets Rakuten Medical sell in those territories before it clears the FDA.

Macau matters most strategically, as a gateway to mainland China. "Once we treat a few dozen patients in Macau, it opens up a gateway for the Greater Bay Area," Maeda explains. "Building Chinese population data will help in discussions with potential partners, and shape how we commercialize our product in China."

Southeast Asia is also on the list. "Technology like ours, which is inexpensive and easy to deploy, could actually really help these populations," Maeda says.

For practitioners and investors, the watch items are clear: Phase 3 readouts, the 2028 FDA filing, and whether the free-platform playbook that won over 200 Japanese hospitals can translate to a U.S. system where surgery remains the default reflex.