When Christophe Weber was appointed CEO of Takeda in 2014, he set out on a mission to transform the 240-year old Japanese pharmaceutical company into a major global player. Over the past six years, that transformation has been progressing at pace, boosted by the US$62 billion acquisition of biopharmaceutical firm Shire in 2019. Insider caught up with Weber to discuss the significance for the Shire acquisition, the challenge of merging two companies from different continents, and how it feels to be one of the very few foreign CEOs in Japan.
Insider: When you took over the CEO position at Takeda, what were your main objectives?
Weber: When I joined the company in 2014, the ambition was to make two big changes. One was to transform the R&D capabilities so we could improve productivity. The second was to globalize the company, to increase scale, so we could be more competitive. We are now seven years down the road and I think we have made great progress.
Insider: What has been the biggest progress in terms of R&D?
Weber: On the research side we have completely re-invented our R&D and now have a pipeline that is extremely innovative. Our R&D used to be focused on a chemistry approach and not on specific disease areas. The main issue was that we were not set up to be a winner in any of the areas where we were playing. We decided instead to focus our R&D on a few key therapeutic areas such as Gastroenterology , Neuroscience and Oncology, and then later we added Rare Diseases following the Shire acquisition. We also actively engage in R&D collaborations and source innovation wherever it occurs. Today, we have more than 200 partnerships and over half of our pipeline is partnered in some way. We completely flipped the model. It’s never finished but I think we have made great steps forward.
Insider: You mention the Shire acquisition. How important has that been for Takeda’s global transformation journey?
Weber: With regards to globalization, we spearheaded a “Transformation Phase” in 2014 to reorganize our business structure and operations. We then had the acquisition of Shire, which clearly gave us the financial strength and geographic scale to be very competitive.
When we looked at this acquisition, we had already been operating as a global company for four years. We were quite mature in the way the company was run and our R&D transformation was very much advanced. The acquisition wasn’t a change of strategy, it was an acceleration of our strategy. It allowed us to immediately increase our scale and increase our competitiveness in many countries. In the US, for example, we tripled our revenue and now have around 18,000 employees. We’ve also been able to improve our competitiveness in Europe and in emerging countries such as China.
Insider: How challenging was it successfully bring together the two companies?
Weber: One of the criteria for the acquisition was that we had said we could do the integration quite quickly and it would not be disruptive to our R&D transformation. We were able to do the integration within 12 months, which is extremely unusual. Within 12 months we were operating as one company.
The key decision was that from the start we took the position that we would welcome Shire employees into Takeda. We didn’t go in with a concept of a merger of equals or reinventing the company. Instead we said let’s bring everybody into Takeda. Six months before closing the deal we were already clear about how we would align the new company. This is a very different strategy to that of many companies, which often keep the different companies separate for years. In fact, we held our first leadership conference with the top 200 leaders just eight days after closing the Shire deal.
Insider: Was there any difficulty in aligning the corporate culture of the two companies?
Weber: We had already been modernizing our corporate culture since 2014, so we felt that we were ready for such a big move without having to reinvent everything. When we welcomed Shire employees into Takeda, we knew that we would of course have to adapt our organization in some ways, but we said look at our corporate culture, look at our values, our code of conduct, we think you will like it. It would have been impossible to do such an acquisition if we had not already been transforming the company culture since 2014.
Insider: Another arm of the transformation strategy has been divestment. Over the past two years, Takeda has divested over US$10billion of assets. What has been the thinking behind this?
Weber: Our core business is closely aligned with our therapeutic areas, which represent today around 80% of our total business. In the 20% remaining, we had a lot of products and brands that were declining or were not strategic. Following the acquisition of Shire, we began divestitures to help us be more focused on our core businesses but also enable us to use the proceeds to pay back the debt we had following the acquisition. So, it was strategic, and also helped us to reduce the debt more rapidly. I think that it has been extremely successful as we have already exceeded the target we set.
Insider: As a high-profile foreign CEOs of a Japanese company, do you feel additional pressure when leading Takeda on its transformational journey?
Weber: No, I don’t think there is additional pressure. I was the only foreign CEO of a Japanese company for quite some time. You don’t get more pressure but there is more scrutiny because people expect a foreign CEO to be slightly different.
When I joined the company as its first non-Japanese CEO, I was very careful to understand the values and culture before making any change. I started with a deep immersion into the company. My first three months was spent meeting employees, doing focus groups, workshops, mainly in Japan but also overseas. This was to get a sense of what we stood for and what our true values were, to make sure that there is some DNA of the company that would be preserved after the changes. Whenever we embark upon a change management program, the first thing we do is explain the rationale for the change, and how this change supports the company’s purpose and vision. If you do that well, people should feel more invested in the transformation and be more accepting of the changes.
Insider: Looking forward, how do you see the pharmaceutical company of the future?
Weber: Highly scientific. Highly innovative. Leveraging data and digital. And also highly global. We are a Japanese company and we will remain a Japanese company, but we have a presence in 80 countries. And with globalisation comes diversity, and this is critical. And of course one of the changes brought on by COVID-19 is the way that we work. We have learned that you can do a lot of work from home and this will change forever the way we work together as colleagues in the company. This is something we are embracing. We are very clear that we will never go back to where we were before the pandemic.