Santen Pharmaceutical - Company History

Santen began in 1890 as Taguchi Santendo, a one-man shop opened by Taguchi Kenkichi in Kitahama, Osaka. Its lead product was not an eye drop at all but a cold remedy, Heburin-gan. The turn came in 1899 with Daigaku Me-gusuri — “University Eye Drops.” Eye disease was widespread in Meiji Japan, demand for topical remedies was deep, and advertising that carried a professor’s portrait carried the name across the country. A cold-medicine peddler had found, in a single product, the trade it would still be in more than 130 years later.

Management left the founding family early. The firm was incorporated as Santendo in 1914, when Mita Tadayuki joined as co-manager; when it became a joint-stock company in 1925 he took the presidency, and Mita-family presidents would run Santen until 1990. The catalogue at that point was still ordinary household medicine — cough syrup, tonics, the eye drops — a general patent-medicine maker rather than a specialist.

The 1935 Yodogawa plant in eastern Osaka moved the company from selling remedies to manufacturing them, but the war undid much of it: air raids burned several facilities, and the Kitahama head office was pulled back inside the factory grounds. In March 1945 the company added “Pharmaceutical” to its name to say plainly what it now was. Recovery came with Daigaku Penicillin Eye Drops (1952), an antibiotic formulation that carried the postwar rebuild. Even so, this was still an over-the-counter business; the decision to sell drugs a doctor prescribes was a decade away.

In June 1958, on the launch of its first ethical drugs, the company renamed itself Santen Pharmaceutical. The logic was one of retreat into strength: over-the-counter medicine is a contest of brand and price that a mid-sized Osaka house could not win against national giants, whereas ophthalmology was narrow but walled — a field where specialist knowledge, not scale, decided entry. In 1962 Santen licensed Roche’s mydriatic Mydrin P for Japan, putting it inside the eye clinic, and in the same year shipped Japan’s first plastic-bottle eye drops. Prescription and OTC on two tracks, everything pointed at the eye: the line the company still runs on was fixed here.

Capital followed. Santen listed on the Osaka exchange’s second section in November 1963 and on Tokyo’s in April 1964, and was promoted to the first sections of both in October 1977. The prescription catalogue filled out — Ecolicin (1970), Flumetholon (1975) — and bottle-pack manufacturing arrived in 1977. Fourteen years separated the second-section listing from first-section status, and they were the years an old patent-medicine name spent buying credibility as a prescription maker.

The 1980s completed the shape: medical devices from 1978, the glaucoma drug Timoptol in 1981, a central research laboratory in 1982, the Noto plant and an OTC Sante 40NE in 1985, intraocular lenses in 1986 — enough breadth that an ophthalmologist told Nikkei Business it felt as if Santen were “trying to become a general trading house for ophthalmology.” The decisive product was Tarivid eye drops (1987), in-licensed from Daiichi, which reached $89.2M (¥12bn) in annual sales by FY1991 and roughly doubled company revenue between FY1987 and FY1991. The counter-example arrived at the same time: in 1986 Santen withdrew the filing for a self-developed antihypertensive for want of clinical data, at a cost put at $26.7M (¥5bn). Winning inside the eye and losing outside it made the focus sharper still.

Morita Takakazu became president in 1990, the company’s hundredth year, and in July set a long-term plan to triple sales from $252.9M (¥37bn) in FY1990 to $1.0B (¥110bn) by FY2000. He was expanding from a position of command: Santen held 43% of Japan’s prescription ophthalmic market in FY1991, against 17% for the second-placed Senju, and the cash Tarivid threw off paid for the build-out.

The method was granular contact with a single specialty. Some 360 sales representatives called on ophthalmologists and nobody else, covering all 6,200 hospitals and clinics in the country with an eye department, and from 1990 Santen began databasing what individual physicians were working on. Research was rebuilt in parallel — the Nara R&D centre and the Shiga plant both opened in 1996 — and the dry-eye drug Hyalein (1995) grew into a domestic mainstay. Selling and discovering off the same set of relationships was the competitive engine of the decade.

Going abroad proved harder than going deep. Taiwan came in 1992, a California subsidiary in 1993, Germany in 1994; the real base was Europe, where Santen built a plant at Tampere in February 1997 and bought the Finnish ophthalmic maker Star in March. America resisted: a device acquisition in 2001, a US holding company in 2002 and a J&J co-promotion in 2004 never produced a sales organization of Santen’s own. China went the other way — a Suzhou subsidiary in 2005, a plant in 2007, direct selling from 2009 — and by then Santen already led the premium Chinese prescription eye-drop market. Consolidated sales rose from $893.3M (¥98bn) in FY2005 to $1.2B (¥111bn) in FY2009 at recurring margins near 20%, and that cash was the war chest for what came next.

In 2010 Santen set Vision 2020: from about $1.3B (¥110bn) of sales concentrated in Japan to $2.3B (¥200bn) as “a specialty company with a global presence.” The instrument was acquisition — the French firm Novagali Pharma in 2011, Japanese rights to Eylea in 2012 — and then, in July 2014, the whole of Merck & Co.’s ophthalmic business and the rights around it, which deepened the glaucoma line and opened Europe and Asia at once; subsidiaries in Switzerland, Italy, the UK, Spain, Thailand, the Philippines and Malaysia followed within the year. In August 2015 Santen handed its anti-rheumatic business to Ayumi Pharmaceutical and became a pure ophthalmology company.

It worked faster than planned. The ¥200 billion target was met in FY2017, three years early; the footprint went from 35 countries to more than 60, overseas sales passed 30% of the total, and the domestic prescription share settled near 50%. Governance moved with it — three of five directors were outsiders by 2014 and foreign ownership reached 45%, among the highest in Japanese pharma outside foreign-controlled firms.

The exception was America. Taniuchi Shigeo, who had built the China business, became president in 2018 and launched Santen 2030 in July 2020, but the accompanying US push — a Verily joint venture and the Eyevance acquisition, both in 2020 — collapsed into write-downs: $377.4M (¥40bn) of impairment on the STN2000100 programme in FY2020, then $229.1M (¥30bn) on Eyevance in FY2022, which closed with an operating loss of $23.6M (¥3bn) and a net loss of $113.4M (¥15bn). Taniuchi resigned in September 2022 and Ito Takeshi took over with restructuring as the first priority.

The fix was to stop doing it. In July 2023 Santen sold part of its Americas prescription portfolio to Harrow Health and exited the commercial business there — its second withdrawal from a self-run US operation — and the restructuring finished ahead of schedule. FY2023 revenue reached $2.1B (¥302bn), the first year above ¥300 billion, and mid-term targets were beaten early two years running; buybacks since FY2022 have retired roughly 20% of shares outstanding under a progressive dividend policy. A new 2025–2029 plan, announced in May 2025, builds on the sales apparatus in Japan, Europe, Asia and China and reaches for new indications such as myopia and ptosis. FY2025 revenue was $1.9B (¥292bn) with operating profit of $319.4M (¥48bn). A cold-medicine shop of 1890 is now a global eye-care specialist in 60-plus countries, still growing in the one field it never left.