Company history

The group begins in September 1921, when Otsuka Busaburo set up a small works at Naruto in Tokushima to make medical magnesium chloride and intravenous solutions out of nigari — the bittern left behind by salt making. Naruto was the centre of Japan’s salt industry, and the knack of pulling chemicals back out of brine was already in the ground there. Infusion solutions are a staple medical product, replacing the fluid a patient has lost; making them demands enormous volumes of water and salt and quality control that never slips. Otsuka moved into injectable solutions in 1946, and infusions settled in as the core business.

What Naruto forged, over the founding decades and through the war, was less a laboratory than a chemical plant — mass production and unforgiving quality control held together at once. Most Japanese drug makers of the same generation specialised in prescription research; Otsuka’s literacy was water, salt and electrolytes, and that literacy did not stop at the edge of medicine. Making an infusion and making a health drink sit close together in formulation and in quality control. That shared factory skill is the reason a single company would later be able to run pharmaceuticals and consumer goods side by side — the odd DNA that everything after 1964 is built on.

In August 1964 the drug business was spun out as Otsuka Pharmaceutical. Otsuka Masahito called it “the eldest son of the group” and handed it the job of ending the habit — long encouraged in the group as “copy what the majors do” — of selling look-alikes of other firms’ drugs. To run it he installed his son Otsuka Akihiko, kept deliberately away from sales and sent down the development and production path alone. Ironically it helped that the new company inherited nothing but a sales arm: Akihiko could build a research organisation from zero, exactly as he wanted. The structure that resulted — earn from the constrained, capital-heavy infusion business, and push the money and the people into something new — is where the two-storey Otsuka starts.

The first product off the upper storey was Oronamin C, launched in February 1965. Because it was carbonated it counted as a soft drink, could not be licensed as a medicine, and therefore could not be sold in pharmacies at all. Otsuka refused to take the fizz out to make it a drug, and instead opened liquor stores and grocers one by one — a pharmaceutical maker fighting on consumer shelves, outside the channel order every rival took for granted. Stock piled up at the wholesalers at first; Masahito later said he was “passing blood and half thinking I might as well die,” and told himself that if it failed he could treat it as having stood for the upper house and lost. In Kyushu alone he put $8,333 (¥3m) a month, $55,556 (¥20m) over six months, into press advertising, and more into television.

In April 1980 came Pocari Sweat — “a drip you can drink,” an electrolyte replacement conceived straight out of the infusion plant, and effectively the product that created the sports-drink category in Japan. Calorie Mate followed in 1983 and opened nutritional foods. The industry’s verdict was cold: “a juice shop from Tokushima, when you get down to it,” and “in the drug business they rate you as a big small-company, Otsuka Beverage.” Yet the technology travelled on its own terms too — after touring the Middle East and judging it the most promising future market, Otsuka set up the wholly owned Arab Otsuka Pharmaceutical in a Cairo free zone in December 1977 and started the plant in 1979, on the strength of infusion know-how alone.

Akihiko had set the direction plainly — Otsuka Pharmaceutical existed for “keeping healthy people healthy” and “returning sick people to health,” both at once — and backed it with capacity, including a $25.3M (¥6bn) safety-testing and biotechnology tower at the Tokushima laboratories. Internationalisation followed from the same logic: believing that perhaps twenty drug makers would survive worldwide, he opened three basic research centres in the United States and Europe from 1982 and then built local sales companies. In 1989 he took control of Pharmavite of California and with it the supplement brand Nature Made — bought at a time when Japan had essentially no supplement market, and when every other Japanese pharmaceutical acquisition abroad was aimed at drugs. Nature Made only reached Japan in 1993; the domestic market took another decade to arrive. The same years reshaped the consumer side at home, with Otsuka Beverage formed in February 1989 and, in July 1990, a decision to sell canned coffee under Nestlé’s Nescafé brand rather than build the product in-house — Akihiko overruling his father on the point.

The medical storey then produced the drug that changed Otsuka’s standing. In November 2002 aripiprazole, discovered in-house and sold as Abilify, was approved in the United States, co-promoted with Bristol-Myers Squibb; a Japanese launch was announced in 2005. World sales reached about $4 billion, putting it alongside Crestor ($5.3bn) and Actos ($4.3bn) among drugs originated in Japan, in a global schizophrenia market worth $25.4 billion by 2010. A mid-sized domestic maker had become a global player in central-nervous-system medicine.

A structure was built to hold those earnings. Otsuka Holdings was established in July 2008 with Akihiko as its first president, and listed on the Tokyo Stock Exchange’s First Section in December 2010 with an offering of roughly $2.5B (¥220bn) — very late for a major drug maker, and deliberately so. The holding company let the pharmaceutical cycle be smoothed by consumer goods and consumer cash be recycled into research, at a time when several rivals were cutting their consumer arms away to become pure pharma. Listing late kept the founding family in charge while taking from the market only the funding room the group needed. Abilify’s patent cliff was already in plain sight.

The 2010s were spent replacing a drug that had been among the five largest medicines in the world. Otsuka named a “global four” to carry the medical business after Abilify: the long-acting injection Abilify Maintena and Rexulti (brexpiprazole) in the central nervous system, Samsca / Jinarc in cardiovascular and renal disease, and the anticancer agent Lonsurf. In June 2015 Higuchi Tatsuo became the group’s second president, the first from outside the founding family, and pushed resources toward Alzheimer’s disease as the growth field that mattered over the long term.

The handover of earnings was messy by nature. Samsca’s Japanese exclusivity ran out in the early 2020s and turned into a drag just as Rexulti found its growth curve in the United States, so the medical business spent years absorbing one product’s decline with another’s rise. What made that survivable was the storey above: nutraceuticals grew steadily throughout, and group revenue reached $13.2B (¥1.74tn) in FY2022. The 1989 Pharmavite bet was finally doing structural work — for the first time, the consumer business was visibly cushioning the pharmaceutical cycle rather than merely coexisting with it.

Underneath, Otsuka had settled into a habit that still defines its accounts. Central-nervous-system research pays enormously when it works and writes off hundreds of billions of yen when it does not, and the company that had won there with Abilify felt obliged to keep betting at the same scale. Impairments became a recurring line — $315.9M (¥42bn) in FY2022 — while business profit kept climbing, so operating profit swung in ways the underlying business did not. Most global majors had retreated from the field; Otsuka stayed, which meant thin competition and no one else to share a failure with.

Research spending has stabilised at a level heavy even by global standards — $2.2B (¥308bn) in FY2023 and $2.1B (¥314bn) in FY2024, roughly 13–15% of revenue. The cost of that concentration showed immediately: impairments jumped from $315.9M (¥42bn) in FY2022 to $1.2B (¥172bn) in FY2023, most of it AVP-786 for agitation in Alzheimer’s disease, the alliance products with Sumitomo Pharma, and Daiya Foods. The resulting P/L is genuinely hard to read — business profit rising while operating profit lurches on write-downs — and only makes sense once you see what pays for it. Nutraceuticals, led by Pocari Sweat and Nature Made, turned over about $3.7B (¥557bn) in FY2024, and that daily cash is what lets the company absorb serial failures in the brain without changing course.

Then, in May 2025, the founding business finally went to America. Otsuka Pharmaceutical Factory’s US subsidiary took a 60% stake in a newly formed infusion company with ICU Medical, creating Otsuka ICU Medical LLC — Otsuka’s manufacturing technology paired with ICU Medical’s distribution, aimed at a North American IV supply that had proved chronically unstable. A hundred and four years after Busaburo boiled bittern at Naruto, the company was positioning infusions as a third overseas earnings pillar beside drugs and consumer goods, in the largest market there is.