Japan stock market week to Sept 22, 2008

Tokyo retreated marginally in the week to September 22. The Nikkei 225 edged down 1.0%, closing slightly above the 12,000 level, while the Topix index lost 0.7%. A series of shock waves, including the bankruptcy of Lehman Brothers and the merger of Merrill Lynch with Bank of America, caused the Tokyo market to plummet on the first day. Equities showed a modest recovery on the next, helped by the news that the US Federal Reserve had decided to rescue the troubled American International Insurance. Additionally, investors were relieved by the news toward the weekend regarding the possible establishment by the US government of an agency to handle mortgage-backed securities of financial institutions to assist them to improve balance sheets. The pharmaceutical index fell 4.3%, underperforming the market.

Chugai declined 4.7%, due to the anticipated delay in the US approval of Actemra (tocilizumab), an interleukin-6 receptor-inhibiting monoclonal antibody for the treatment of rheumatoid arthritis, originated by Chugai (see page 23). Parent firm Roche said that the US Food and Drug Administration provided a response letter for the Biologics License Application on Actemra. The additional information requested by the FDA does not involve safety and efficacy issues or require any additional studies, and is related to the manufacturing of the drug and certain other components including final labeling. Roche stated that, with the expected completion of the FDA's requests and an approved label, the company does not foresee any problem to influence the quality and supply of Actemra in USA. However, this is likely to be delayed from the initially expected clearance this month.

Takeda fell 3.3%, even though it announced that the findings of the large-scale clinical trial of the angiotensin receptor blocker antihypertensive drug candesartan (Blopress in Japan, Amias and Kenzen in Europe, Atacand in the USA) confirmed the drug's effect in restraining the onset of diabetic retinopathy. The finding is scheduled to be reported in The Lancet. The DIRECT study involved 5,231 diabetic patients and compared candesartan with placebo for more than four years. The program consists of three separate trials, namely: type 1 diabetic patients without retinopathy for primary prevention; type 1 subjects with retinopathy for secondary prevention; and type 2 diabetics with retinopathy for secondary prevention. The candesartan group of type 1 diabetes saw restraint of the onset of diabetic retinopathy by 18% compared with placebo.