Japan stock market week to April 20, 2009

Tokyo remained flat in the reporting period ended April 20 following the previous week's modest gain. The Nikkei 225 closed unchanged at 8,924,  while the Topix index edged down 0.1%. The market opened lower,  reflecting an increase in profit-taking pressure on the recent surge in  share prices of auto and high-technology companies. However, a firmer  market was observed later in the week supported by players' recognition  that, amid the worst of the global financial turmoil, they might have  been over-looking solid moves in New York. Mid-week, some China-related  stocks - including steel and shipping - advanced as beneficiaries of the  country's expected economic expansion, but these fell back on a  disappointing report that China's Gross National Product growth for the  January-March 2009 period slowed to 6.1% in real terms. The  pharmaceutical index was up 0.8%, outperforming the market.

Santen was the best performer, advancing 11.6% after it out-licensed  tafluprost (brand name of Tapros in Japan, Taflotan in Europe), for the  treatment of glaucoma and ocular hypertension, to Merck & Co, awarding  exclusive rights in western Europe (excluding Germany), the USA, South  America and Africa (Marketletter April 20). Santen retains rights in  Germany, eastern and northern Europe and the Asia Pacific region,  including Japan. Tafluprost is a postaglandin analog co-developed with  Asahi Glass for the reduction of intraocular pressure in primary  open-angle glaucoma and ocular hypertension.

Takeda continued a moderate upturn with a 1.1% gain, as the media  reported that its profit decline in the current fiscal year could be  more modest than the company previously forecast. Operating income would  likely fall 31% year-on-year to 290.0 billion yen ($2.96 billion) versus  the initial projection of 270.0 billion yen (down 36%) reflecting  lower-than-planned marketing promotion expenses due to the delayed US  launch of the DPP-4 inhibitor anti-diabetes agent alogliptin  (Marketletters pasim). However, turnover would likely be 1,530.0 billion  yen (up 11%), below the target of 1,560.0 billion yen, because of  sluggish sales of the anti-diabetes drug Actos (pioglitazone) and the  negative impact of the yen's rise. Reports suggest that Takeda's profits  in the next fiscal year may rise due to the absence of expenses  associated with the acquisition of Millennium in May 2008 and the dearth  of the National Health Insurance drug price cuts.