Shionogi acquires Japan Tobacco Pharma Units in US $1B deal

JAPAN – Shionogi is making a major move to grow its drug pipeline and reach its long-term goals by acquiring Japan Tobacco’s pharmaceutical operations.

In a deal announced Wednesday, the Japanese drugmaker will pay over 150 billion yen (US $1.05 billion) to take over Torii Pharmaceutical and Japan Tobacco’s pharma businesses, including its U.S. subsidiary Akros Pharma.

This includes nearly 70.3 billion yen for Japan Tobacco’s majority stake in Torii. The acquisition supports Shionogi’s strategic plan to expand in key therapeutic areas by 2030, especially in infectious diseases.

Japan Tobacco’s pharma arm brings expertise in small-molecule drug development and research in areas like immunology, inflammation, cardiovascular and central nervous system disorders.

Meanwhile, Torii’s focus on skin conditions, allergies, and kidney diseases adds new strengths to Shionogi’s portfolio.

Although the companies only began formal discussions this year, Shionogi revealed that talks about a possible deal began in August 2024.

Shionogi believes that owning Japan Tobacco’s drug R&D capabilities will help speed up development of promising new treatments.

In the 2024 fiscal year, Shionogi posted revenue of 435 billion yen ($3 billion) and has set its sights on nearly doubling that to 800 billion yen (US $5.6 billion) by 2030.

Japan Tobacco, on the other hand, is stepping away from pharmaceuticals altogether. CEO Masamichi Terabatake explained the decision, saying that despite past profits, the pharma landscape has shifted.

“We’ve decided that transferring the business to Shionogi is the best path forward,” he said.