Beyond the limits of in-house discovery: the ~$62 billion Shire acquisition (2019)

What buying won, and the cultivating it deferred

The character of this acquisition shows in the sheer size of the number. Unable to originate an Actos-class drug from its own laboratories, Takeda had since Leuprin in 1989 kept buying its business base from outside — Millennium, Nycomed, ARIAD, Shire. The roughly $62 billion price tag was less a mark of confidence in growth than the reverse of a fear: that without buying time with money, Takeda could not stay among the world’s leaders. Filling the gaps quickly by buying both businesses and people, it skipped the time to cultivate — and the cost came back in the form of letting go of Alinamin, the signboard product.

By taking Shire in, Takeda turned a family company descended from an Edo-period drug dealer into a foreign-led global drug specialist. Revenue jumped from about $18.1B (¥2tn) to past $27.5B (¥3tn), and the centre of the business moved from domestic distribution and consumer drugs to overseas rare disease and discovery. Against that, the double burden of repaying six-trillion-yen-class debt while growing the next mainstay passes straight to the management that succeeds Weber. For a company that measures its 240 years on a long ruler, whether this acquisition was an expansion or an overreach will be decided by the number of new drugs still to come.