Merger Rumors for Japan's Drug Firms

Shionoghi and Sumitomo Pharmaceuticals are both facing big cuts in revenues as American and European partners take back marketing rights to major products. Sumitomo Bank, a major shareholder and debtholder in both, is likely to try to put the two companies together.

Can Japanese drug companies survive as independents? Japan’s lifetime employment traditions makes restructuring tough in any event, though companies are downsizing through attrition. Takeda, for example, apparently intends to decrease its total employment by 20%, largely through attrition.

But Japanese companies have been reluctant to move more aggressively—unless they are forced to do so.

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