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Pharmaceuticals

Astellas restructures Japan operations

Company expects to slim its home country head count by 600

by Jean-François Tremblay
May 23, 2018 | APPEARED IN VOLUME 96, ISSUE 22

Astellas, at a glance

Founded: 2005, through the merger of Yamanouchi Pharmaceutical and Fujisawa Pharmaceutical

Headquarters: Tokyo

CEO: Kenji Yasukawa

Number of employees: 16,600

R&D workforce: 3,200

Annual sales: $12.6 billion

R&D expenditures: $2.1 billion

Main products: over half of company’s sales are treatments uses in urology, transplants, and oncology

Note:Data are for the fiscal year that ended March 31, except for R&D head count, which is from the previous fiscal year.

Change is coming to Japan’s other big drug company. Just weeks after Takeda Pharmaceutical struck a deal to acquire Shirefor $62 billion, Astellas says it is downsizing operations in its home country, a rare move for a Japanese firm.

As part of a new corporate strategy, Astellas will shutter several subsidiaries in Japan. The list includes Astellas Research Technologies, a unit employing 200 people who primarily perform preclinical research and manage the company’s lab animals; a Japanese sales subsidiary; and an employee training outfit.

Astellas will offer voluntary retirement packages to employees affected by the closures. Altogether, it forecasts that 600 of its staff will opt to leave.

Separately, Astellas is selling Astellas Analytical Science Laboratories, an internal testing lab, to the analytical services firm Eurofins. About 140 employees are involved. Eurofins plans to upgrade the labs so they can offer services to other customers as well as Astellas.

In its results for the fiscal year that ended March 31, Astellas reported a 25% decrease in net profit and a 1% drop in sales. It attributed most of the profit shrinkage to costs associated with restructuring outside Japan.

Staffers at major Japanese companies normally enjoy lifetime employment, and as a result, downsizings such as the one Astellas is undertaking are rare in the country.

Japanese companies looking to cut costs normally first do so outside their home base. In 2010, for example, Astellas cut 150 jobs at OSI Pharmaceuticals, a U.S. company it had just bought. And last summer, it announced that it would discontinue operations at Agensys, a California-based oncology firm it acquired for over $500 million in 2007.

Astellas’s new strategic plan stresses an aspiration to focus R&D on fairly specific areas, such as cell therapy for blindness, treatments for muscular degeneration, and the study of immunology for treating or preventing allergies, autoimmune diseases, and infectious diseases. The plan also highlighted a shift in the company’s resources toward products in later stages of development.

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