It will allow Kyowa Kirin International - formerly ProStrakan - to increase staff numbers in Galashiels from 150 to 200 over the next five years.
The move comes after the firm announced record turnover of £251m last year, up from £222m in 2015.
It has taken a 10-year lease on a building next to its headquarters to allow for the expansion.
It will increase the size of its HQ by 40% and create a complex capable of housing 200 staff.
Work is expected to be completed later this year.
Lucy Alkin-Young, KKI's office manager, said: "We've been growing so fast that we were simply running out of room in our existing head office, so the expansion is being welcomed by the whole team.
"Our extended facility will provide us with a headquarters that is appropriate for an international pharmaceutical company."
Dr Tom Stratford, KKI president, said the investment underlined the company's commitment to Galashiels and Scotland.
"The business is growing at pace and we are proud of what we have achieved since joining Kyowa Hakko Kirin in 2011," he said.
"Our turnover has grown from £105m to £251m in that time, overall staff numbers have more than doubled to stand at almost 600 today and we recently filed for European approval of the first of Kyowa Hakko Kirin's pipeline products."
A Scottish pharmaceutical firm has revealed plans to expand its headquarters in the Borders.