Japan stock market week to Sept 15, 2008

Tokyo lost further ground in the week to September 15 (four trading days only because the last was a national holiday in Japan). The Nikkei 225 dropped 3.3% to close at the 12,200 mark, after temporarily hitting a six-month low, while the Topix index fell 3.2%. US reports about the bailout of troubled mortgage companies somewhat eased Japanese investors' worries about the USA's financial industry. However, another report that major broker Lehman Brothers continued to record net losses in the June-August period amid its financial troubles came as negative news. A later report of a possible buy-out of Lehman by a big financial institution encouraged Tokyo to bounce back in the last trading day, but the subsequent news of the broker's collapse came while the market was closed. The pharmaceutical index was off 1.9%, yet outperformed the market.

Astellas rose 1.3%, after it decided on the sale and transfer of its Grand Island, New York, USA, plant owned by its subsidiary to APP, a specialty drug company. The move is in line with Astellas' mid-term plan, which includes reducing the number of production sites to around10 by the fiscal year ending March 2011 to achieve an optimal system. The transfer of the plant was immediate upon execution of the agreement with APP. In order to avoid any supply interruption, Astellas will lease the plant from APP for continued manufacturing of the anti-atopic dermatitis agent Protopic (tacrolimus) ointment into the spring of 2009.

Kissei dipped 0.2% after it concluded an exclusive in-licensing agreement with fellow Japanese firm Y's Therapeutics on YSCMA (YS110), a humanized anti-CD26 monoclonal antibody. Under the terms of the deal, Kissei will develop and commercialize YSCMA in Japan for the treatment of malignant mesothelioma. Y's Therapeutics is a privately-owned biopharmaceutical company focusing its R&D on products for the treatment of inflammation-mediated disease and cancer. YSCMA binds specifically to CD26, a transmembrane glycoprotein being expressed in some cancer cells. Preclinical animal studies conducted by Y's indicated that the drug had a clear anti-tumor effect. An Investigational New Drug application was filed with the US Food and Drug Administration in February 2008 for a Phase I trial in oncology.