Merging with the US biotech venture Qpex: A chronicle of striving for the integration process aimed at maximizing value

Released on April 16, 2024
In June 2023, the SHIONOGI Group merged with Qpex Biopharma, a San Diego-based pharmaceutical company that specializes in the development of treatments for infections due to antibiotic-resistant bacteria. The integration process was led by an office involving Shionogi & Co., Ltd., Shionogi Inc. (its American subsidiary), and Qpex, with significant contributions from Reiji Yokoyama and Shogo Nishijima of the corporate planning department. We will ponder on the significance of this merger and the journey of the integration process over approximately 6 months.
Reiji Yokoyama & Shogo Nishijima

Reiji Yokoyama, who joined the company in 2010 (pictured on the right), worked in pharmaceutical research, focusing on identifying the optimal formulations and manufacturing methods for medications. In 2021, he moved to the corporate planning department.


Shogo Nishijima, who joined the company in 2011 (pictured on the left), was involved in the research and management of manufacturing methods for active pharmaceutical ingredients, focusing on producing them safely and cost-effectively in large quantities. Aiming to be involved in company-wide initiatives, he joined the corporate planning department in 2022.

As part of the corporate planning department, our goal is to maximize the synergies with SHIONOGI through the merger.

—As individuals who transitioned from research roles to the corporate planning department, could you tell us about the kind of work you are involved in?

Yokoyama: The corporate planning department is tasked with defining the company's strategy and direction and spearheading projects that are necessary to realize these goals. For instance, our main duties involve advancing projects that are related to the formulation of medium-term management plans, M&A aimed at strengthening the management foundation, business alliances, and corporate branding activities, in collaboration with various internal and external stakeholders.


With the recent merger, members from Shionogi Inc. and Qpex have also joined the integration office, where we have led the formulation of policies and execution plans for the merger alongside global members. Since the initiation of the merger, we have coordinated with related departments, including research and development, accounting and finance, human resources, legal, and IT, to complete various tasks that are necessary for maximizing value.

—Merging the operations and mindsets of two companies with distinct cultures is indeed a challenging task, isn't it?

Nishijima: Although we have merged at a management level, it does not mean that the business systems and the corporate cultures of the two companies will automatically integrate. It is crucial to have regard for both cultures and build an environment and trust where we can collaborate toward our goals. The corporate planning department has been working hard to maximize the effects of this integration between the two companies.


Yokoyama: Both SHIONOGI and Qpex have strengths in the field of infectious diseases, but this merger is a collaboration that enhances each other’s strengths. We have established a good relationship with Qpex, actively discussing the potential for new drug developments and moving forward with the integration process together.

The merger with Qpex is a win–win situation for both parties.

—What was the intention behind SHIONOGI’s decision to merge with Qpex?

Nishijima: In the field of antibiotic research and development, addressing the escalating issue of antimicrobial resistance (AMR) is a critical challenge. Qpex has been very effective in research and development within this area, having created many beneficial compounds to date. By combining the strengths in infectious disease research that SHIONOGI brings, we can expect to urgently develop more valuable pharmaceuticals.


Despite being indispensable, antibiotics embody a dilemma owing to AMR concerns, which suggest that they should be utilized sparingly, making it a challenging business in terms of profitability. Collaborating with external networks, including regulatory authorities and academic partners, instead of relying solely on in-house capabilities is crucial.

Yokoyama: Qpex also has a strong network with external agencies. For instance, they have established a solid network with Biomedical Advanced Research and Development Authority in the United States, which supports the development of vaccines, drugs, and treatments in preparation for infectious disease crises. This network significantly aids in the development of globally valuable antimicrobial drugs. Connections with biotech ventures around San Diego and opinion leaders in the field of infectious diseases also serve as valuable assets.

—SHIONOGI Group, in its STS2030 Revision of the mid-term management plan, emphasizes the global deployment of not only infectious disease treatments but also comprehensive care for such diseases, alongside sustainable business models. A primary goal is to protect people from the threat of infectious diseases and thereby liberate society from these dangers. . It appears that the merger with Qpex was a particularly compatible match in this context, wasn't it?

Yokoyama: Absolutely. In the increasingly critical field of infectious diseases, collaboration that is aimed at delivering valuable pharmaceuticals to patients offers value beyond a typical merger.

—What specific benefits do you see from the integration in terms of research?

Nishijima: Qpex has specialists in “boronic acid derivatives.” Boron chemistry is one of Qpex's strengths and represents a research area where we anticipate synergistic effects with Shionogi's efforts.

Note 1: A field of chemistry focused on understanding the unique properties of boron to develop new applications and technologies.


Furthermore, Qpex's “novel β-lactamase inhibitors” show potential against a variety of β-lactamases2. These inhibitors can prevent the breakdown of active antimicrobial agents, making it more difficult for bacteria to build resistance. They may also be useful against drug-resistant bacteria.

Note 2: Hydrolytic enzymes produced by bacteria that inactivate the antimicrobial activity of β-lactam antibiotics.

—It seems that Qpex is also exploring combinations of antimicrobials suitable for their “novel β-lactamase inhibitors.” Could the potential for these combinations with Shionogi's antimicrobials have been one of the reasons for the merger?

Yokoyama: Pathogens continually mutate, acquiring drug resistance. As a result, treatments for infectious diseases have been constantly developed to counter these evolving pathogens. As a leading company in infectious disease treatment, we must continue to provide the next solutions for drug-resistant bacteria. In the never-ending fight against AMR, developing a great partner like Qpex, who shares our direction and commitment, represents a significant step forward for the SHIONOGI Group.

A merger process characterized by earnest engagement and in-depth discussion.

—Could you share a memorable episode from the integration process with Qpex?

Nishijima: A particularly memorable moment was our first face-to-face meeting, the “Kick-off Meeting.” We visited San Diego and presented our visions for post-merger integration to each other. It seemed like the beginning of something new when everyone met and finally connected in person.

Yokoyama: We have always aimed to communicate with Qpex as openly and honestly as possible. Sugarcoating our words could result in superficial interpretations and misunderstandings. We focused on sincerely listening to each other's opinions and engaging in meaningful discussions.


Mergers involve many decisions, and some might opt to simply dictate these decisions to the acquired company. Nevertheless, this approach could lead to confusion, a decline in employee motivation, and, in the worst-case scenario, the departure of key personnel. Qpex, being an invaluable partner that shares SHIONOGI's commitment to tackling infectious diseases, comprises a tightly knit group of 14 specialists. We have had ongoing dialogs with Qpex's management regarding the integration policies and our shared goals to ensure that together, we can continue to create value as part of the SHIONOGI Group.


Therefore, during the 6 months of the integration process, we held weekly online meetings and met in person four times. Through these communications, we expressed a heartfelt welcome and a commitment to respect Qpex's style as much as possible. This approach fostered a cooperative and enthusiastic stance from Qpex, which I am pleased to note.

Finding relief in the comforting words, “We enjoyed the integration process.”

—In the process of integrating people and building connections, were there moments that you found particularly rewarding?

Yokoyama: I felt a sense of accomplishment when I received words of appreciation like “You did well” from Qpex members. It might sound grandiose to talk about “resolve” or “challenge,” but I truly believe I gave it my all. Frankly, there were times when it seemed almost too much to bear, but the passion for the project fueled my perseverance and determination.


Nishijima: When the broad outline of the integration policy was established, and it was time to hand over the integration office's role to other members, I visited Qpex again. During that visit, hearing Qpex members say, “You did well” and “It was good that we could enjoy the process of the merger” was incredibly reassuring. It was clear that we had moved forward with their understanding and consent. Ultimately, once you decide to do something, you have to see it through, right? Of course, this was all possible because of everyone's cooperation, but we believed in ourselves and pulled through.


For this article as well, we have received strong and warm comments from Qpex members, which I will introduce below.

Message from Qpex members.

Qpex team

Qpex and SHIONOGI have been working closely since the close of our merger last July. We have completed crucial phases of integration, including our IT, finance, and HR functions. Our development teams have worked together to advance new research programs with SHIONOGI teams in Osaka.


Qpex team members are enthusiastic about being in a SHIONOGI Group Company that will discover and develop critically needed, durable, and sustainable medicines for treatments of infectious diseases, particularly those diseases that have been impacted by AMR. The Qpex team embraces the values of trustworthiness, boldness, innovation, and respect for diversity. Together, we will contribute to society—and we will also play to win! We believe that our US-based team will contribute meaningfully to Shionogi’s business goals as articulated in STS2030, and we are excited to be part of the journey together.

—As you continue to complete the integration process, what kind of contributions do you wish to make as part of the corporate planning department?

Yokoyama: I believe it is crucial to ensure that the $100 million investment is effectively utilized to provide value to society and create value for our company. We aim to maximize synergies to return more value to society than the amount invested.


The merger with Qpex will likely serve as a flagship model for Shionogi's globalization in the infectious diseases field. Having a solid research and development base in the United States is a significant step for the SHIONOGI Group and serves as a foothold for global expansion.


Nishijima: I believe the global expansion of infectious disease research will become even more critical. By advancing research and development with Qpex at an accelerated pace and contributing to society by combating the threat of infectious diseases, Shionogi's presence will undoubtedly grow. Our mission moving forward is to bequeath the baton to the future alongside our new colleagues.

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