Japan stock market week to June 18, 2007

Tokyo rallied in the week ended June 18. The Nikkei 225 gained 1.8%, recovering the 18,000 mark at the close, while the Topix index rose 1.6%. The favorable market development reflected the brightened investor sentiment with the improvement of external factors, including the strength of New York markets and the yen's continued depreciation against the US dollar and euro. The news that the Bank of Japan decided in its policy meeting to maintain the major short-term interest rates caused government bond yields to decline. Investors' buying interests in risky assets, including stocks, resumed because the previous concerns about higher yields of bonds receded. Export-oriented stocks and real estate drew buying attention. The pharmaceutical index dipped 0.8%, underperforming the market.

Kissei gained 0.5% after it out-licensed to Eisai Glufast (mitiglinide calcium hydrate; see page 23), a rapid-acting insulin secretagog for the treatment of diabetes, providing the latter firm with exclusive development and commercialization rights in 10 ASEAN countries. Glufast has been on the Japanese market since 2004 with the indication of improving post-meal blood glucose levels in type 2 diabetic patients. Glufast is said to rarely induce hypoglycemia due to its short duration of action and, based on this feature of the drug, Kissei places a high expectation for its sales growth potential.

Astellas edged up 0.4% on its launch of Celecox (celecoxib), a selective COX-2 inhibitor non-steroidal anti-inflammatory drug originated by US pharmaceutical giant Pfizer (see page 23). Celecox is indicated for the relief of inflammation and pain associated with rheumatoid arthritis and osteoarthritis. Pfizer will import active ingredients and Astellas will manufacture and market the product in Japan under the co-promotion accord. Celecox has a National Health Insurance reimbursement price of 83.70 yen ($0.68) per 100mg tablet.