Takeda Chemical Industries Ltd.: Lessons from a Japanese Pharma Major

Takeda's thrust on overseas expansion was being seen as a direct fallout of the rising competition within Japan from foreign firms like Pfizer and Merck. With this investment, Takeda seemed to be looking towards strengthening its R&D position in the US, the largest pharmaceutical market in the world. Takumi Yamagishi, a pharmaceutical industry analyst at Shinko Securities Co., a leading financial services provider in Japan, said, "The main purpose probably is to expand drug development in the US."¹ Analysts felt that Takeda planned to use the fresh funds to expand its business by buying rights to other companies' drugs. A Takeda spokesperson, Seizo Masuda supported this view, "We are preparing for funding needs such as alliances and licensing of drugs."²

However, Takeda stated that its growth could slow down in the near future for two reasons. Firstly, some of its best selling drugs were maturing (i.e. the products had reached saturation), and therefore may not have high demand in the market. Secondly, the drugs which it was developing currently were not expected to be commercially available until after 2005. These issues could prove troublesome for Takeda as competition in the global pharmaceutical market had become very intense in the early 21st century. Analysts felt that there was a strong need for Japanese companies to spruce up their international research and development (R&D) activities to sustain growth. An industry observer commented, "Companies without a strong R&D product pipeline may not fail, but they will certainly lag behind and face an uncertain future."⁴