Japanese Pharmas Expand Cross-Border M&A Footprint in US and EU Amid Domestic Market Stagnation

Key Players and Strategic Moves

Several leading Japanese pharmaceutical companies are spearheading this international expansion:

• Otsuka Pharmaceutical, Japan’s largest pharma by revenue, has aggressively pursued assets overseas, including the acquisition of Massachusetts-based autoimmune and rare disease company Jnana Therapeutics for over $1 billion and a $613 million inflammation and immunology deal with Swedish biotech Cantargia in 2025[1].
• Daiichi Sankyo has built a robust immuno-oncology pipeline through partnerships and acquisitions, notably its collaboration with AstraZeneca on antibody-drug conjugates (ADCs) like Enhertu, initially valued at up to $8.5 billion and expanded with subsequent deals potentially worth an additional $6 billion. In 2023, Daiichi entered a $22 billion partnership with Merck to develop three ADCs, underscoring its commitment to innovation in oncology[1].
• Takeda Pharmaceutical, the largest Japanese pharma by market capitalization, set a precedent with its $62 billion acquisition of Shire in 2018, signaling early recognition of the need for global scale and diversified assets[1].
• Other firms such as Terumo and Shionogi have also increased their pace of international acquisitions, with Terumo acquiring the UK-based organ transplant company OrganOx in August 2025[1].

Drivers Behind the Cross-Border M&A Surge

Analysts attribute this surge in outbound M&A to the limited growth prospects within Japan’s domestic pharmaceutical market, which has been largely stagnant. Japanese pharma companies are thus motivated to access innovative technologies, diversify pipelines, and capture growth in larger, more dynamic markets such as the US and EU[1].

Stephen Barker, a Tokyo-based analyst at Jefferies, highlights that Japanese firms are no longer outliers in seeking international growth, with a growing number of companies actively acquiring substantial foreign assets to bolster their global competitiveness[1].

Implications for Global Pharma and Private Equity

This trend of Japanese pharma cross-border M&A aligns with broader global healthcare investment patterns, where private equity and strategic buyers seek to capitalize on innovation hubs in the US and Europe. The focus on specialty areas such as immuno-oncology, rare diseases, and inflammation reflects a strategic pivot toward high-value therapeutic segments.

For private equity investors and deal advisors, understanding Japanese pharma’s outbound M&A strategies is critical for identifying partnership opportunities, co-investments, and potential exit strategies in sectors like biotech and specialty pharma. The emphasis on bolt-on acquisitions and collaborations also suggests a preference for deals that can rapidly enhance pipeline value and commercial potential.

Contextualizing Within Broader Industry Trends

Japanese pharma’s internationalization complements other notable global deals and partnerships in 2025, such as Fosun Pharma’s collaboration with Pfizer on GLP-1 receptor agonists targeting metabolic diseases, underscoring the ongoing globalization of pharmaceutical R&D and commercialization[2].

Visualizing Japanese Pharma M&A Activity 2022-2025

Outlook: Sustained International Expansion and Innovation Focus

Looking ahead, Japanese pharmaceutical companies are expected to maintain and potentially accelerate their outbound M&A activities, especially in high-growth therapeutic areas such as immuno-oncology, rare diseases, and inflammation. The strategic partnerships with global biopharma giants and the pursuit of cutting-edge biotech assets position Japanese firms to remain competitive in the evolving global pharmaceutical landscape.

For C-suite executives and dealmakers, monitoring these cross-border M&A trends is essential for anticipating shifts in competitive dynamics, identifying collaboration opportunities, and navigating regulatory complexities in key markets like the US and EU.