Japan’s $100bn drug industry has long struggled to be a force on the international stage. The home market, the world’s second biggest, is highly competitive and government spending is falling. Is Thursday’s all-cash deal, which sees Takeda pay $8.8bn for the equity of Millennium Pharmaceuticals of the US, the perfect prescription?

The price tag is a record for Japanese pharmaceuticals, but Japan’s number one drugmaker, 11th in the world by market capitalisation, is buying a relative minnow. Last year, Millennium racked up revenues of $527m and lost money at the operating level. Takeda wants the company for its strength in oncology, which now accounts for 15 per cent of the Japanese company’s revenues. Velcade, Millennium’s top-ranking blood cancer drug, made net sales of $265m last year and is forecast to generate up to $345m this. Takeda will need rather more than that if it is to deliver on its target of becoming a top-three global oncology company.