Abstract for: Modeling and Analyzing R&D Strategy of Takeda Pharmaceutical Company

A pharmaceutical company depends on investment in research and development as a critical foundation for its survival and growth. Therefore, pharmaceutical companies must expand their internal pipelines (product candidates) both qualitatively and quantitatively while considering their financial strategies. Achieving this objective requires a logical understanding of the interrelationship between financial strategy and R&D strategy and the ability to make timely and appropriate decisions. This study develops a model that incorporates the interrelationship between financial strategy and R&D strategy, thereby contributing to more informed managerial decision‑making. This study examines Takeda Pharmaceutical Company (hereafter, Takeda) as a representative pharmaceutical firm. The constructed model consists of one balancing loop that suppresses R&D activities and one reinforcing loop that amplifies R&D activities. The model's behavior is as expected from the following results. MAPE analysis yielded 6.24%, supporting the dynamic hypothesis. Additionally, inputting extremely small or large values for R&D expenses produced the anticipated behavior. From 2009 to 2017, balancing loops prioritizing financial stability—suppressing R&D activities amid successive patent expirations, project terminations, and litigation—dominated. Following the massive M&A in 2018, reinforcing loops driving R&D activities rapidly became dominant.