Tokyo pharma stock market: week to April 9, 2001

Tokyo's stock market rebounded early in the week to April 9 with theexpectation for details of emergency economic package to be unveiled. Following the disclosure of the details, however, the market retreated steeply because the content of the announced package was similar to what had been expected earlier, with some issues remaining undecided.

The Nikkei 225 inched down 0.7% to close the week at below the 13,000 level, while the Topix index edged up 1.1%. The critical decisions of the package were the two-year time limit on banks' clearance of bad debt of high risks, the restraint set on banks' shareholdings, and establishment of the government-supported body, the Bank Equity Purchasing Corp. However, the package failed to include the exact timing to establish such an organization and the extent of the support by the government. The Liberal Democratic Party's presidential election is scheduled for mid-April, being followed by an appointment of a Prime Minister (the party's election eventually decides the new Premier because the coalition parties led by the LDP make up the Diet's [parliament's] majority vote).

The pharmaceutical index advanced 3.5%, significantly out-performing the market, with most of the major drug stocks recording week-on-week gains. Sankyo rose 7.8% in response to a series of news on the research collaboration it entered with Gene Logic on subscribing two segments of Gene Logic's GeneExpress Suite of databases consisting of the BioExpress Module (for use in target identification and validation trials) and the ToxExpress Module (for prioritizing candidate compounds) for Sankyo's drug discovery and development programs. Also, Sankyo agreed with ArQule on the extension of their 1997 collaboration agreement through 2004, and that Arqule will provide Sankyo with access to ArQule's Compass Array libraries. Furthermore, Sankyo signed a three-year collaboration contract with X-Ceptor on development of selective modulators of the liver X receptor (LXR) which acts as a key sensor for cholesterol (see page 7).