Acquiring Toyama Chemical and entering pharmaceuticals (2008)

How to recompose a vanishing core business into the next field of medicine

What makes this acquisition stand out is that it was not a move forced on the company at the end of a financial crisis. While its core business was still turning a profit, Fujifilm anticipated the disappearance of its single-legged reliance on photography and widened the base of medicine all the way to treatment. For an imaging-diagnostics company to buy a pharmaceutical company outright was a discontinuous bet — the technological connection was thin, and the customs of approval and development were different. The power to capture an image in diagnosis and the power to cure disease with medicine call for different resources, even within the same field of medicine. Fujifilm crossed that gulf in a single leap, by acquisition rather than in-house cultivation.

More than a decade on, healthcare has grown into one of Fujifilm’s principal pillars. The birth of the antiviral Avigan, the contract manufacturing of biopharmaceuticals, and the taking-in of the diagnostic-imaging business from Hitachi were each a stone laid one step earlier by the acquisition of Toyama Chemical. That said, drug discovery is a business of large hits and misses, and success was not guaranteed at the moment of purchase. How to recompose the technology and capital of a vanishing core business into the next field of medicine — the acquisition of Toyama Chemical remains a decision that gave one answer to that question.