By Rocky Swift
TOKYO, May 14 (Reuters) – Bain Capital-owned Tanabe Pharma plans to bring up to three new drugs to Japan each year as the former Mitsubishi Chemical unit doubles down on its home market, the company’s top executives told Reuters in an interview.
The drugmaker, purchased by U.S.-based Bain last year for about 510 billion yen ($3.2 billion), aims to rebuild its development pipeline through a mix of internal research and licensing of overseas medicines, Chief Executive Akihisa Harada and Chairman Costa Saroukos said on Tuesday.
Bain recruited the pharma industry veterans last year to try to turn around Tanabe, founded nearly 350 years ago in the western city of Osaka, as it tests whether the private equity model can succeed in Japan’s fragmented and mature drug market.
“Look at many other pharmaceutical companies in Japan in the past five to 10 years – they’ve really limited the amount of investment in Japan. They just saw Japan as a declining market,” said Saroukos, formerly the chief financial officer of Japanese market leader Takeda.
“This is an opportunity to really double down in Japan, bringing in new, innovative assets and investing in R&D.”
SURGE IN PRIVATE EQUITY-LED BUYOUTS
Private equity-led buyouts are surging in Japan, where regulators and shareholders increasing pressure on companies to spin off non-core assets.
Japan leads Asia with nearly $14 billion in inbound mergers and acquisitions in 2026 so far, LSEG data shows.
The nation is the world’s fourth-biggest drug market, with 2024 sales of about $61.6 billion and the highest per capita use of medicines among developed countries, health sector researcher IQVIA says.
But pharma companies complain about unpredictable price cuts under a nationalised health scheme, while regulatory hurdles have cause a so-called “drug lag” of years between a treatment’s U.S. debut and its availability in Japan.
Harada, a former president and representative director for Pfizer in Japan, said the market remains attractive because of unmet medical needs among a shrinking, ageing populace.
“All we have to do is look for drugs that have had a lag from the West and then bring them into this country, so I think that’s a huge opportunity,” said Harada.
U.S. TEAM AIMS TO IDENTIFY TWO OR THREE DRUGS A YEAR
Tanabe has a team in the U.S. charged with identifying two or three new drugs it can bring to Japan each year, focusing on immunology, rare diseases, oncology, and neurology, Harada said.
The most promising candidate in the company’s own pipeline is a treatment for a rare disease, erythropoietic protoporphyria (EPP), that causes extreme sensitivity to sunlight.
Now in Phase-III trials, the drug could be “potentially a blockbuster,” Saroukos said.
The executives acknowledged that Tanabe had a thin pipeline and poor profitability when Bain took it over. Core operating profit amounted to 65.2 billion yen in the drugmaker’s last year under the Mitsubishi Chemical umbrella.
This year Tanabe unloaded one of its top sellers, Radicava, a treatment for amyotrophic lateral sclerosis (ALS), to Japan-based Shionogi for $2.5 billion to help fund new investments.
The company aims to push its core operating profit-to-sales ratio into the range of 20% to 30% to match domestic competitors.
“But it’s going to take time. It’ll take between three and five years to get there,” Saroukos said.
($1=157.6900 yen)
(Reporting by Rocky Swift; Editing by Clarence Fernandez)
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