By Anton Bridge and Kane Wu
TOKYO (Reuters) -U.S. private equity firm Bain Capital has bought Mitsubishi Tanabe Pharma in a deal worth 510 billion yen ($3.4 billion), saying it was encouraged by prospects of regulatory change for Japan’s drug industry.
The Osaka-based firm has a pipeline of drugs relating to the central nervous system, immuno-inflammation and oncology. It has operations in more than a dozen locations across three continents outside Japan, according to its website.
“We believe there are promising signs for growth and untapped opportunities in Japan’s life sciences industry as government and regulators have launched several initiatives to accelerate the development and approval of innovative medicines in the Japanese market,” Ricky Sun, partner at Bain Capital, said in a statement.
Japanese health authorities have been looking at areas of reform, aware that many drugs developed in the United States and Europe have yet to be approved in Japan, in particular orphan and paediatric drugs.
Bain is making the investment mainly via its Asia private equity fund with contributions from its global life sciences fund, said a person with knowledge of the transaction who declined to be identified as the information was not public.
The seller, Mitsubishi Chemical, said it had made the sale as it was not in a position to provide the large-scale investment necessary to strengthen Mitsubishi Tanabe’s research and development capacity.
Proceeds from the sale will go towards investment in its core chemicals business as well as to help it reduce debt and enhance shareholder returns.
Mitsubishi Tanabe saw core operating income slide 61% to 56.2 billion yen ($370 million) in the last financial year.
Private equity-led buyouts are booming in Japan as companies increasingly carve out non-core businesses, under pressure from Japanese authorities to raise corporate and shareholder value.
Bain and other foreign funds have ramped up acquisitions, helping propel inbound M&A in Japan to the top of the leaderboard in Asia in 2024 for the first time since 1999.
($1 = 151.8400 yen)
(Reporting by Anton Bridge and Kane Wu; Editing by Edwina Gibbs)
