Company history

Eisai began in November 1936 as a moonlighting project. Naito Toyoji, managing director and head of new drugs at Tokyo Tanabe Seiyaku, had seen on a tour of Europe and America how deep the research establishments of the advanced countries were, and concluded that Japan would never produce its own new medicines without laboratories of its own. Tanabe’s owners refused on the abacus — the arithmetic did not work — so Toyoji built the lab himself, as a limited partnership called the Sakuragaoka Laboratory in Mikawashima, Tokyo, staffed through personal connections with Tanabe’s plant manager and doctors from Juntendo Hospital, and looked in on it only on Thursday evenings. In 1937 he put up a proper building of about 462 square metres in Arakawa and obtained a manufacturing licence; that is the year Eisai counts as its founding.

The laboratory’s first two products, Yubera and Sampoon, went on sale through Tokyo Tanabe in 1938 and sold. A factory followed at Honjo in Saitama in 1941, together with a company, Nihon Eizai, which absorbed the laboratory in 1944. When Toyoji retired from Tanabe at fifty-five and turned to his own firm full time, a side venture created by a serving executive of another drug house had become an independent mid-sized manufacturer — an unusual route in an industry where the established names mostly sold imported goods.

The years that followed were about staying alive: vitamin C injections, dentures, venereal-disease prophylactics, anything that sold, with 1949 to 1952 the worst stretch in the company’s history. In the middle of it the founder nearly broke the company with an over-ambitious expansion, and his eldest son Naito Yujiro answered by importing an idea from outside the pharmacy: “it was in order to restrain my father that I introduced the concept of cash flow into the company.” Eisai’s financial discipline was not adopted from a textbook; it came out of a father-and-son tug-of-war, and the pull between the father’s appetite for investment and the son’s insistence on cash would run through the company for decades. The way out of the slump was also organisational rather than scientific — a national distributor network, the Chocola-kai, set up in October 1952 on three-year contracts, which competitors first dismissed and then copied, followed in 1957 by the first of a series of long-range plans. The katakana name Eisai was adopted in 1955, shares were offered to the public in 1960, and the company listed on the Tokyo Stock Exchange in 1961.

Naito Yujiro took the presidency in 1966 — “because I have been here longest,” as he put it — and made the defining choice of the company’s middle age. Takeda, Sankyo and Shionogi were tearing each other apart on the price of antibiotics; Eisai, short of capital, stayed out. “Antibiotics are in a ferocious price war right now,” Yujiro said, and pointed his researchers instead at cardiovascular disease, a field thin enough that a small firm could take its time without being crushed by a larger rival. It was strategy by elimination, forced by a lack of money, and it became the company’s single greatest point of difference.

The proof took nine years. Work on Neuquinon, an application of coenzyme Q10 to chronic angina, began in 1965; other entrants dropped away one by one, and Eisai became the first company in the world to commercialise the compound, in April 1974. Sales went from $3.3M (¥1bn) in the year to March 1975 to $127M (¥28bn) by March 1981 — roughly a quarter of the company. With Methycobal added in 1978, Eisai posted six consecutive years of higher sales and profits from the trough of March 1976; between 1976 and 1982 revenue multiplied 2.1 times and recurring profit five times, the recurring margin held at 15–16%, and the equity ratio reached 54.1%. Yujiro described the route in his own terms: while Takeda, Sankyo and Shionogi “were racing down the Meishin Expressway in big coaches, we came along the old Tokaido road with a few small cars and motorbikes.” He did not expect home runs — “singles and doubles are fine, so long as they are original.”

The same instinct sent the company abroad early. Eisai built a joint-venture plant in Indonesia in 1970, ahead of its peers and against the grain of an industry that mostly licensed Western products for the domestic market; because most of its products were its own, it was free to sell them anywhere. Coups and devaluations made it a near-run thing — “more than once or twice we set out to wind it up and withdraw” — and the losses were absorbed in a way peculiar to Eisai: when one overseas subsidiary could not collect payment and was settled in shoes that all turned out to be left-footed, the president covered the loss himself. Yujiro treated his own assets, shareholding included, as the ceiling on what the adventure was allowed to cost. Taiwan, Thailand and Singapore followed, a US subsidiary was established in 1987, and in the same year the Tsukuba laboratories finally took up cancer, a field the company had avoided for years.

In 1988 Yujiro handed the company to his eldest son, Naito Haruo, the third generation of the founding family and the man who would run Eisai for the next three decades. Haruo did not abandon his father’s method; he re-applied it. Cardiovascular medicine was no longer thin, so he narrowed again, this time onto the central nervous system and cancer — turning a mid-sized cardiovascular house into a specialty pharma company that still refused to compete where the majors were strongest.

The result arrived in 1997. Aricept, launched in the United States that year, was the world’s first acetylcholinesterase inhibitor for Alzheimer’s disease; it did not merely enter a market but created one, and it fixed Eisai in the minds of physicians worldwide as the Alzheimer’s company. In September of the same year the proton-pump inhibitor Pariet gave it a second pillar in gastroenterology. A company that could never match Takeda or Sankyo on scale now had blockbuster-class earnings from two therapeutic areas of its own choosing.

A decade later the arithmetic of a two-drug company caught up with it. With Aricept’s North American patent expiry approaching, Eisai bought the US biopharmaceutical firm MGI Pharma for about $3.9 billion, closing in January 2008: an outright purchase of an oncology portfolio and an American sales platform, in cash, on borrowed money. Interest-bearing debt swelled to roughly $4.0B (¥414bn), goodwill to $1.7B (¥171bn), and operating profit collapsed from $894.1M (¥105bn) to $171.3M (¥18bn) in a single year. Buying growth rather than growing it broke the cash-flow rule the family had lived by since Yujiro imposed it on his own father — a doctrine suspended, deliberately, in exchange for time.

The years after the acquisition were spent repairing a stretched balance sheet and simplifying the company around it. The Misato plant was sold in 2014, and in December 2015 the entire gastrointestinal business — Pariet included — was carved out into EA Pharma, a joint venture with Ajinomoto. Eisai gave up a franchise it had built from scratch less than twenty years earlier in order to put everything behind neurology and oncology; it was Yujiro’s narrowing carried one step further by his son, and it made the trade-off legible from outside.

The numbers show the cost and the recovery together. Under IFRS from the year to March 2015 revenue was $4.5B (¥548bn), against $6.2B (¥734bn) in the year before the acquisition, but margins in the pharmaceutical business improved and the equity ratio was back to 58.9% by March 2016. Smaller, and deliberately so.

What ultimately paid for the MGI adventure was not MGI. Lenvima, discovered in Eisai’s own laboratories, was approved in the US, Europe and Japan in 2015, and a 2018 global alliance with Merck & Co. paired it with Keytruda in endometrial and renal-cell cancer; sales reached $2.1B (¥298bn) in fiscal 2023. Company revenue recovered to $6.5B (¥696bn) by March 2020 and $5.8B (¥756bn) by March 2022. The alliance was expensive — the profit split with Merck cost some $1.0B (¥142bn) in fiscal 2023 — but what remained funded the next bet in the brain. Eisai earned in cancer and spent in neurology, and the two halves of the strategy finally met.

Leqembi (lecanemab), an anti-amyloid-beta antibody developed with Biogen of the United States, met its primary endpoint in September 2022, won accelerated US approval in January 2023 and full FDA approval that July. Where Aricept had treated symptoms, Leqembi acts on the disease itself — a change of therapeutic concept, delivered twenty-six years later by the same company, in a field littered with failures that larger firms had walked away from. It is the clearest possible vindication of a strategy of waiting in a place nobody else wants to stand.

The advantage was never only the molecule. Through the long development years Eisai kept investing in the ground around it: a US field organisation of neurology specialists, relationships with integrated delivery networks, diagnostic pathways — all of it an extension of the physician network built in the Aricept era. The seed planted in 1997 took twenty-six years to flower, and the network that supported it now works as a barrier to entry.

By 2025 approval had spread to 53 countries and territories, and the constraint on growth shifted from regulators to prescribers. Eisai launched IQLIK, a weekly subcutaneous autoinjector that replaces the infusion, in the United States in October 2025, and is developing blood-based biomarkers with Fujirebio and Roche to replace PET imaging. Diagnosis and dosing, until now confined to specialists, are being opened up to primary care. A mid-sized firm that used to do nothing but discover drugs is remaking itself into one that builds the whole pathway from diagnosis to treatment and sells at scale.