Takeda Pharmaceutical — Company History

Credit pooled by the guild, and the fourth Chobei's turn to Western drugs

In 1722 Tokugawa Yoshimune laid down a system under which medicinal materials grown across Japan were bought and sold through the wholesalers' associations of Edo, Osaka, Kyoto and Sakai, subject to inspection by those associations, and granted the wholesalers a privileged standing. The drug dealers' guild 株仲間 of 2-chome Doshomachi in Osaka was formed that same year. It was sixty years later, in June 1781, that Takeda Chobei I (武田長兵衛) took over a guild share and set up in business on his own. The shop traded under the house name Omiya Chobei (近江屋長兵衛), stood on Sakaisuji in Doshomachi, and started life dealing in Japanese and Chinese herbal medicines. During the Bunka era (1804–18) the family bought and moved into the corner property on Nakahashi-suji in Doshomachi, and that site later became the head office. From the founding through to the Meiji period each generation carried on the trade of its forebears, selling Japanese and Chinese medicines.

The fourth Chobei, who took over the family business young after the Meiji Restoration, worked at economy, scrutinised the goods he handled, and set about importing Western drugs of superior quality. In May 1871 he began buying imported Western pharmaceuticals, laying the function of an import merchant over that of a herbal broker. In 1894 a foreign department was set up inside the shop for the first time, handling imports of potassium iodide, potassium bromide, sodium bicarbonate and caustic soda. Imported medicines were expensive, however, and counterfeits were rife, so the fourth Chobei planned to manufacture in-house. In 1895 he took the Uchibayashi Pharmaceutical Works (内林製薬所) at Nakatsu in Osaka Prefecture as a dedicated factory and moved into the manufacture and study of medicines. At that stage it was still no more than a modest cottage industry. It was also in the fourth generation that the house began to use the Takeda surname.

The fifth Chobei puts manufacturing and research in place

When the fifth Chobei took over the business in 1904, he pushed harder on both manufacturing and sales. In 1909 the firm succeeded in making bismuth subnitrate (次硝酸蒼塩) and other bismuth-salt preparations, which until then had been available only as imports, and began producing some twenty pharmacopoeial medicines alongside them. In 1908 a Takeda testing department and research department were established, and these became the parent body of the later laboratories. The fifth Chobei set out four aims: expanding the pharmaceutical business, production research, the development of original new medicines, and a sales network tied to wholesalers in every part of the country. He organised the Sagi-Uroko Kai (サギウロコ会), a body of regional distributors, to bind the trade together, and between 1915 and 1918 built the large factory that is now the Osaka plant.

Before the First World War, Japan had almost no pharmaceutical industry worth the name. What the country produced at the end of the Meiji period ran to little more than menthol, potassium iodide, galenicals and diastase, and the commercial activity of the drug wholesalers — houses that had grown out of an ancient trade into import merchants — was far livelier than any manufacturing. When war broke out in Europe in 1914, the supply of imported medicines was cut off and the drug market fell into severe confusion. Takeda, which had made the import of Western drugs the pillar of its business, lost the premise it stood on. It reinforced the Uchibayashi works and, in August of that year, opened the Takeda Pharmaceutical Testing Laboratory at Nakatsu-cho outside the city. Research there was directed by Takeda Jiro (武田二郎), a younger brother of the fifth Chobei. The Takeda research department was also set up in the same month of 1914.

The turn to in-house manufacturing, and incorporation

In October 1915 Takeda founded the Takeda Seiyakusho (武田製薬所) at Kozu village outside the city — the site on which the present Osaka plant stands — and used it for the study, manufacture and testing of medicines. In 1918 these manufacturing and research arms were separated out into an independent company, Takeda Seiyaku, with capital of ¥1 million. Around thirty medicines were by then being made successfully, and they went to replenish drugs the industry had run out of. In August 1921 the firm set up Daigo Seiyaku, a limited partnership, and in June 1922 Takeda Kagaku Yakuhin. The former was renamed Nihon Pharmaceutical in June 1946, the latter Wako Pure Chemical Industries in October 1947.

When the war ended and imports from Europe resumed, some products could match neither the quality nor the economics of the imported article, and part of the range had to be discontinued or cut back. In January 1925 Takeda Chobei Shoten merged with Takeda Seiyaku, which had earlier been split off, and K.K. Takeda Chobei Shoten was incorporated with capital of ¥5.3 million. The date of incorporation was 29 January, and the new body held both the manufacturing and the sales arms. The Uroko mark, registered as a trademark in 1898, takes the shape of a fish scale and, like a tree, is drawn with growth rings — an emblem of getting larger and stronger year by year. It was adopted as the company emblem in 1943, when the name was changed to Takeda Pharmaceutical Industries.

Laboratories built up, and a branch network across the continent and the south

From the start of the Showa period Takeda worked on training research staff, improving laboratory equipment and building up the attached library, and set about modernising the Osaka plant at the same time. Among new products it succeeded in synthesising vitamin preparations such as Kyoryoku Metabolin (強力メタボリン), and it began making chemotherapeutic agents including sulfamine drugs. The economic panic of 1934 hit the industry hard. Effort also went into expanding sales, and the scale of the business grew steadily; during these years the company moved abroad, setting up farms, branch offices and resident agencies across Asia. It started with medicinal-herb gardens at Chiayi in Taiwan in 1927 and in Okinawa in 1929, and from 1934 to 1938 opened branch offices at Fengtian, Taipei, Dalian, Shanghai, Keijo, Tianjin, Canton, Bangkok and Bombay.

Research aimed at creating domestically made medicines bore fruit in the synthesis of vitamin C in 1937, B1 in 1938 and K in 1942. In 1940 the fifth Chobei laid down the Takeda family code 規, five articles headed by the injunction to face the public and serve the nation before all else. In August 1943 the company changed its name to Takeda Pharmaceutical Industries and Takeda Eitaro (武田鋭太郎) became president, taking the family name as the sixth generation. The outgoing president, the fifth Chobei, renamed himself Wakei (和敬) and withdrew to the post of adviser. In July 1944 Takeda absorbed Konishi Pharmaceutical and Radium Pharmaceutical of Tokyo, which became the basis of the later Tokyo branch and Tokyo plant, and capital stood at ¥35.7 million that month.

Postwar recovery and the stock market listing

Takeda came through the chaos of the immediate postwar years with its production equipment intact, and used the raw materials it held and whatever else it could obtain to make vitamin B and C preparations and glucose injections. Rather than divert its products to the black market it supplied the public through regular channels, and that policy raised its standing with the world at large. In May 1946 it acquired the site of the former Navy arsenal at Hikari in Yamaguchi Prefecture and began building the Hikari plant, given over mainly to bacterial preparations. A Sapporo plant was newly built in Hokkaido. That brought the works to six — Osaka, Kanagawa, Inagawa, Tokyo, Hikari and Sapporo — with output reaching 11 to 12 per cent of the national total. The sales network widened too: three branches at Tokyo, Sapporo and Fukuoka, offices at Nagoya, Hiroshima and Sendai, and 1,700 contracted distributors.

In May 1949 Takeda listed its shares on the Tokyo and Osaka stock exchanges. Technical results kept coming: in December 1952 its process for making vitamin K was judged among the best in the world and licensed to American Cyanamid of the United States, and in 1953 its researchers discovered a method of synthesising santonin, a synthesis reckoned the hardest problem in world chemistry. Capital, raised several times after the war, reached ¥1.4 billion in June 1953 and ¥2.1 billion in June 1954, and total sales for the year to March 1955 came to $18.4M (¥7bn). To secure raw materials the company opened a large experimental farm at Fukuchiyama.

Alinamin, and the reach of diversification

In March 1954 Takeda launched Alinamin, an over-the-counter medicine whose active ingredient was a vitamin B1 derivative. Vitamin preparations became the pillar that carried postwar Takeda: as of 1968 they made up about 27 per cent of sales. Medicines as a whole accounted for 65 per cent of turnover, and vitamins for more than 40 per cent of that; the company's vitamin output alone came to roughly four-tenths of Japan's total production. Outside medicines, a food division grew on the back of Plussy (プラッシー), sold through rice shops nationwide, and the compound seasoning Ino-ichiban (いの一番), reaching 17 per cent of the whole in 1968. In August 1962 the company set up Takeda Taiwan Ltd.

By 1968 Takeda was organised into divisions for pharmaceutical manufacturing, drug sales, food, chemicals, agrochemicals and overseas business, together with a research and development division, and annual sales had reached $333.3M (¥120bn). Capital was ¥15 billion and the payroll numbered 11,611. Besides Hikari there were plants at Shimizu, Takasago, Shonan and Tokuyama, each working with the division it belonged to. The affiliates included Yoshitomi Pharmaceutical, Daigo Nutritive Chemicals, Nippon Lederle, Wako Pure Chemical Industries and Takeda Food Industries. Through repeated moves into foods, cosmetics and agrochemicals related to medicine, Takeda had become a company that kept pharmaceuticals at its core while carrying food, chemicals and agrochemicals alongside.

In 1959 Takeda began selling clioquinol (キノホルム) preparations, then used as an intestinal antibacterial. During the 1960s neurological symptoms — visual and gait disturbances following treatment for diarrhoea — were reported around the country, and what came to be called SMON grew into a social issue. The state halted sales of clioquinol preparations in 1970, and by the middle of the decade class actions had been brought nationwide. Takeda began booking litigation provisions from 1977 in preparation for settlements and compensation, and the burden stayed with it for a long time: the consolidated balance sheet carried a line for the SMON litigation compensation reserve, at ¥2,779 million as of March 2010 and still ¥2,386 million as of March 2013.

Secondment to TAP, and the bet on Leuplin

When the substance patent system came into force in 1976, patents on new medicines acquired real force and Takeda increased its research and development spending. In 1983 Konishi Shinbei (小西新兵衛), then chairman, called in Takeda Kunio (武田國男) and ordered him to take up a post at TAP, the joint venture with Abbott Laboratories of the United States. Kunio crossed to America as vice-president. TAP was formally established in the United States in May 1985. What Kunio found there was, in his words, the advance guards of two factions snarling at each other on American soil; he later wrote in the company magazine that they were three years of nightmare, and that without the experience at TAP he would not be who he was.

The question at TAP was which products to carry. Antibiotics were Takeda's speciality, and a magnificent new plant for them had already been completed. The other candidate was Leuplin (リュープリン), a prostate cancer drug — an unproven medicine that no one could yet judge, and one that had no effect unless injected every day. Kunio came down on the side of Leuplin. Antibiotics were a mature field in which a war of attrition was already visible, and the call was to bet on the niche. A few years later a sustained-release formulation was developed that held the effect over a long period, Leuplin began to sell, and TAP found its feet. Expectations inside the company had been limited at the outset: Morita Katsura, the managing director in charge of development, said in 1985 that the market, regrettably, was not that large.

Takeda Kunio's reforms, and the narrowing to prescription medicines

In June 1993 Takeda Kunio became president. The sudden death of the eldest brother of the Takeda house had lifted a third son — who by rights should have spent his life as a dependent on a side branch — into the president's chair, and observers mocked the appointment as a restoration of power to the Takeda family. The year he took office was also the year the company was overtaken on recurring profit by its rival Sankyo. Before taking the post Kunio had banned the hiring of directors' children, and had declared that he would be the last president to come from the Takeda family. In 1994 he first applied a performance-based appraisal and pay system to senior management, and extended it to the entire workforce in April 1997 — a scheme that stripped out seniority and set pay by job size.

In 1995 Takeda launched a medium-term plan, 95/00. It set out to cut a payroll that had swollen to 11,000 down to 7,500 by 2005, and took the unprecedented step of offering early retirement — the first such programme in the company's history. The reaction was fierce. The previous head of the house, the fifth Chobei, had opened farms of no urgent use at the end of the war so as to re-employ every returning soldier and repatriate without condition, and voices inside the company asked what on earth his son thought he was doing. The managing director for corporate planning suffered a nervous illness, and anonymous letters reached Kunio's desk. In 1996 the five businesses outside prescription medicines were moved onto an in-house company system with their own profit and loss, forcing them to stand without leaning on pharmaceutical earnings. The pharmaceutical division was placed under the president's direct control and the old guard of drug sales swept out. The laboratories, which had been known as the ivory tower, were also broken up and reassembled, with units of unclear purpose such as the applied technology institute abolished.

In 1996 Kunio underwent a fifteen-hour operation in which his prostate, bladder and lymph nodes were removed. Even so, less than two months later, in June of that year, he chaired the annual general meeting himself, and five months after that he appeared at the press conference for the September interim results with his head shaved bald by chemotherapy, disclosing his cancer and declaring himself cured in the same breath. The revised medium-term plan of July 1998 set four targets for fiscal 2000: a return on equity of 11 per cent, a gross margin of 54 per cent, a break-even ratio of 65 per cent and operating profit of ¥15 million per employee. A headcount of 9,800 at the end of that March was to fall to 8,700 by fiscal 2000, and he remarked that by 2010 five thousand would do. The phrase he used through the reform was that the company was a soaking wet rag, dripping at the merest touch, that had not yet been wrung out at all. By the year to March 2000 he had achieved a 12 per cent return on equity, clearing the target a year early; operating cash flow reached $1.5B (¥159bn), twice the fiscal 1995 level, and market capitalisation $52.9B (¥5.7tn), 3.8 times the fiscal 1995 figure.

An American sales network of its own, and unease about the next mainstay

In the United States Takeda pressed on with building a sales network of its own, setting up Takeda America in March 1993, the Takeda America Research and Development Center and Takeda Ireland in October 1997, Takeda America Holdings that December, Takeda Pharmaceuticals America in May 1998 and the Takeda Europe Research and Development Centre that September. TAP was ranked first for urology sales representatives in survey-house assessments in 1996 and 1997, but it had succeeded so well that Abbott would not entertain a buyout of its stake, and Takeda's own sales strategy was deadlocked. The wholly owned sales subsidiary launched in 1998 allied with Eli Lilly of the United States, strong in diabetes, in preparation for the American launch of Actos, the next major drug, planned for 2000.

At the end of July 1998 market capitalisation stood at $24.4B (¥3.2tn), 2.8 times the level of five years earlier. Even so, in the American magazine BusinessWeek's 1998 ranking by market value Takeda slipped from 137th to 174th, while the leading pharmaceutical group — Merck, Pfizer, Bristol-Myers Squibb and Glaxo Wellcome — moved up. By 2000 TAP's net profit reached $861.3M (¥93bn), exceeding that of Takeda itself. What worried Kunio most was the succession: the other three members of the management committee were between 62 and 65 years old. In June 1998 he created a corporate officer system and began developing and selecting candidates for the board. Of himself he said that it was also a fact that the company did not move forward unless he gave the order.

Hasegawa sheds the non-pharmaceutical businesses and buys in America

In June 2003 Hasegawa Yasuchika (長谷川閑史) became president, taking over from Takeda Kunio after ten years of unbroken growth in sales and profit; Takeda at that point ranked only fifteenth in the world. Hasegawa explained the absence of any major new drug after the diabetes treatment Actos by saying that past success had bred, without anyone noticing, overconfidence and slackness, and that the organisation had turned conservative and bureaucratic. It had chased fashions instead of pressing the advantage of Japanese researchers working in Japan, he said, had drifted into computerised synthesis and mass screening, and had put too much weight on publishing in specialist journals. His own summing-up was that four products had come out in about ten years, that the taste of home runs was hard to forget, and that the company had failed to nurture properly anything that was merely a bloop single. Of his own role he said that his job was to turn a company where a charismatic manager had charged ahead using a handful of trusted lieutenants into one run by an ordinary team.

The shedding of the diversified businesses accelerated under Hasegawa. In April 2005 the environmental products business, Japan EnviroChemicals, went to Osaka Gas Chemicals, and that June the animal health business, Takeda Schering-Plough Animal Health, to Schering-Plough. In January 2006 the vitamins business, BASF Takeda Vitamins, went to BASF Japan, and that April the chemicals business, Mitsui Takeda Chemicals, to Mitsui Chemicals. In April 2007 the food business, Takeda-Kirin Foods, went to Kirin Brewery; that October the beverage and food business, House Wellness Foods, went to House Foods and the agrochemicals business, Sumitomo Chemical Takeda Agro, to Sumitomo Chemical. On the buying side, Takeda acquired Syrrx of the United States in March 2005.

In March 2008 Takeda dissolved the TAP joint venture with Abbott and made TAP a wholly owned subsidiary, and in the same month bought Amgen's Japanese arm, Amgen K.K. That May it took Millennium Pharmaceuticals of the United States as a subsidiary through a tender offer. The total consideration was about $8.5B (¥880bn), the largest investment Takeda had ever made. Hasegawa explained the acquisition premium by saying that the average over recent years for biopharmaceutical deals was around 50 per cent, and that at 52.9 per cent this one fell within that range. Velcade, the multiple myeloma treatment Millennium held, had won marketing approval only four and a half years after clinical trials began. Takeda faced patent expiries on Prevacid and Actos in the United States around 2010, and part of the aim was to blunt that blow with Velcade's growth.

The Nycomed deal, and a chief executive brought in from abroad

In September 2011 Takeda bought Nycomed of Switzerland for €9.6 billion, about $13.8B (¥1.1tn). It took in one stroke a sales network spanning Europe, Russia, Asia and Latin America, and the number of countries it operated in went from 28 to more than 70. The consideration was paid in cash, without issuing new shares, using its own funds plus about ¥600 billion of borrowing. A balance sheet that had been effectively debt-free changed at that point: interest-bearing debt rose from ¥1.3 billion at the end of March 2011 to ¥542.8 billion at the end of March 2012. Takeda's world ranking in prescription medicines by sales moved from sixteenth to twelfth.

The research structure was reorganised as well. In February 2011 the company opened the Shonan Research Center in Kanagawa Prefecture, consolidating the research sites that had been at Osaka and Tsukuba, a site employing some 1,200 people at the time. But contrary to expectations, promising candidate drugs kept failing in development. Over the nine and a half years from the year to March 2004 to the September 2012 interim, about ¥2.4 trillion went into research and development without producing anything on the scale of Actos. As he pushed the organisation towards globalisation, Hasegawa brought in a foreigner from a major Western drug company to head the research division, and entrusted four of the five unit-head posts covering the priority therapeutic areas to outsiders recruited from abroad.

In June 2014 Takeda installed Christophe Weber (クリストフ・ウェバー), formerly of GlaxoSmithKline of Britain, as president, and made him chief executive in April 2015. Weber was born in France in 1966, took a doctorate in pharmacy and pharmacokinetics at the University of Lyon and spent about twenty years at GlaxoSmithKline. Asked how long he would serve as a foreign president, he replied that he would do ten years at the maximum. Under Weber the Shonan Research Center was restructured between 2016 and 2017, and by 2017 the number of researchers there had fallen to around 500. Oncology and gastrointestinal research were consolidated in the United States, leaving only neuroscience and psychiatry at Shonan. In April 2018 the site was opened to start-ups as the Shonan Health Innovation Park, with Takeda itself becoming a tenant.

Shire, and drug discovery under a mountain of debt

In February 2017 Takeda acquired ARIAD Pharmaceuticals of the United States through a tender offer. In July 2018 it opened a Takeda global head office in Chuo-ku, Tokyo, and that December listed American depositary shares on the New York Stock Exchange. Then, in January 2019, it acquired Shire of Ireland by scheme of arrangement. The sum committed was about $62.4B (¥6.8tn), among the largest cross-border acquisitions ever made by a Japanese company. Consolidated revenue rose from $19.2B (¥2.1tn) in the year to March 2019 to $30.8B (¥3.29tn) in the year to March 2020. Interest-bearing debt swelled from ¥985.7 billion at the end of March 2018 to ¥5,751.0 billion at the end of March 2019, goodwill stood at ¥4,240.3 billion and total assets at ¥13,792.8 billion.

To bring that debt down, sales of non-core businesses continued. In April 2017 the reagents, fine chemicals and clinical diagnostics business, Wako Pure Chemical Industries, went to Fujifilm. In March 2021 the whole of Takeda Consumer Healthcare was handed to a fund managed by Blackstone at an enterprise value of $2.2B (¥242bn), separating from the parent the over-the-counter business that included Alinamin, on sale since 1954. In October 2022 Takeda took over Nihon Pharmaceutical's plasma-derived products business by company split, in July 2024 sold the shares of Nihon Pharmaceutical to Alinamin Pharmaceutical, and in March 2025 sold the shares of Takeda Teva Pharma to Teva. Interest-bearing debt had come down to ¥4,515.3 billion by the end of March 2025.

At the results briefing in May 2024 Weber announced a restructuring costing $924.1M (¥140bn) a year. The company closed its San Diego site, cut about 850 jobs in Boston for a reduction of some 1,000 across the United States, and in August announced a voluntary redundancy programme in Japan as well. Entyvio, the ulcerative colitis drug that is its mainstay, earns about $5.3B (¥800bn) a year, but it came in with Millennium, acquired in 2008, and its patent expires in 2032. Takecab, worth about $792.1M (¥120bn) a year, reaches the end of its patent in 2031, so close to ¥1 trillion of combined revenue is due to disappear. In late-stage development, investment was concentrated on TAK-279 for autoimmune disease and the in-house TAK-861. Weber said that had Takeda not acquired Shire, its standing in the United States would be far lower than it is. For the year to March 2026, revenue of $28.5B (¥4.51tn) yielded operating profit of only ¥6.2 billion and a net loss of ¥152.4 billion. In June 2026 Julie Kim, who had led the American business, is due to take over as chief executive.