Japanese pharmaceutical companies are increasingly pursuing mergers and acquisitions (M&A) outside their home market, a shift from their previous strategy of focusing on internal growth and the domestic market. Daiichi Sankyo’s success with antibody drug conjugates has positioned it as an active buyer, marking a significant change in approach.
Stephen Barker, an analyst at Jefferies in Tokyo, noted that this trend is not limited to Daiichi Sankyo. “The habit of acquiring outside assets,” typical of U.S.-based companies, “has spread to Japanese pharmas,” Barker said. Companies such as Terumo and Otsuka have made notable international deals recently. Terumo acquired U.K.-based OrganOx in August, while Otsuka purchased Massachusetts-based Jnana Therapeutics for over $1 billion and entered into a $613 million agreement with Swedish biotech Cantargia.
A recent report by Jefferies analysts highlighted the increasing pace at which Japanese pharmaceutical firms are seeking assets abroad, particularly targeting U.S. and European startups with advanced pipelines in oncology and nervous system disorders.
Reflecting on these developments, Maki Umemura, a historian at Cardiff University who studies the Japanese pharmaceutical sector, commented on the potential long-term impact: “I talked with some people in Boston who thought they were the center of the biotech industry, and that’s true. But that won’t last forever.”
Historically, Japanese pharma companies focused on internal development and domestic sales following World War II. Umemura explained that Japan became known for its antibiotic research but faced challenges scaling up due to limited financial resources: “The Japanese industry faces difficulty in raising funds,” she said. “There just isn’t the financial capital.”
Key events have spurred recent changes within the industry. The 2012 Nobel Prize awarded to Shinya Yamanaka for induced pluripotent stem cells led to increased national investment in biotechnology. More recently, a January 2024 initiative by the Tokyo Stock Exchange publicized companies trading below book value to encourage higher valuations and attract more capital.
Daiichi Sankyo has gained attention through large partnerships—most notably with AstraZeneca since 2019—which began with Enhertu (an antibody-drug conjugate) worth up to $8.5 billion in payments and milestones for Daiichi Sankyo. The collaboration expanded further in 2020 with another deal potentially worth $6 billion leading to Datroway’s FDA approval for certain breast cancers earlier this year.
In 2023, Daiichi signed a $22 billion partnership with Merck covering three additional ADCs; one asset was withdrawn after failing to improve survival rates but another showed promise in Phase II trials for small cell lung cancer.
Takeda remains Japan’s largest pharma company by market capitalization and has actively pursued overseas expansion—including its $62 billion acquisition of Shire in 2018—and spent over $12 billion recently amid restructuring efforts that included discontinuing its entire cell therapy pipeline.
Barker explained this shift: “The traditional Japanese market has been stagnant for some time and doesn’t hold prospects for growth going forward,” he said, “so companies are more interested in growing in markets outside Japan.”
According to Jefferies data cited by BioSpace reporters, Japanese healthcare firms completed nine deals so far this year compared to two deals in 2022; however total deal value fell from $5.2 billion (2022) to $3.8 billion (2025).
Jefferies analysts observed: “Active acquirers such as Otsuka and Terumo have raised the pace at which they are acquiring outside assets while Shionogi, Ono and Kyowa Kirin have started buying substantial assets as well.”
Recent examples include Astellas’ purchase of Iveric Bio ($5.9 billion), Ono’s acquisition of Deciphera Pharmaceuticals ($2.4 billion), both involving late-stage or approved drugs; Otsuka’s buyout of Jnana Therapeutics brought early-stage molecules plus ongoing partnerships with Roche and Neurocrine.
Potential future targets identified by Jefferies include Immunocore (U.S.)—with late-stage oncology candidates—and Spain's Oryzon Genomics working on mid-stage oncology/neuropsychiatric drugs.
Barker emphasized global ambitions: “They’re looking globally,” he said. For example, Otsuka acquired Switzerland-based Araris Biotech ($740 million), while Sumitomo bought Myovant Sciences ($1.7 billion) based out of Basel focusing on oncology/women's health.
“Technological superpowers wane over time,” Barker added.“I don’t know if Japan is just looking east or west—they look where technology is available that could provide a good partnership.”
A correction issued December 10 clarified details about clinical trial results related to Merck/Daiichi's patritumab deruxtecan asset: The correct overall response rate was 48.2% among extensive-stage small cell lung cancer patients.
