Tokyo pharma stocks - week to November 5

Tokyo saw a pullback in the week ended November 5 following its strengthin previous weeks, amid an unfavorable market environment. The Nikkei 225 and the Topix index dwindled 1.6% and 2.6%, respectively. Investors generally took to the sidelines, discouraged by disappointing reports; the Japanese jobless rate reached a record 5.3% in September, while US third-quarter Gross Domestic Product dropped 0.4%, the first quarter-over-quarter decline in eight and a half years, reflecting the impact of the September 11 attacks. The increase in US anthrax cases and uncertain Japanese corporate earnings prospects for the next fiscal year, following the estimated steep setback in this fiscal year, restrained investors from undertaking aggressive trading activities. The market could move on a weak note in the near term, local observers note.

The pharmaceutical index went down 2.1%, underperforming the broad market. Takeda dropped 4.9%, although it announced a plan to construct a facility specializing in analysis of genes and protein, at a cost of 3.3 billion yen ($27.1 million), at the site of the Tsukuba Research Center. The plan aims at drug target discovery by utilizing orphan receptors with unknown ligands and disease-specific regulated genes which Takeda has discovered in its laboratories. Thus far, the company has found eight orphan receptors or ligands, including the MCH receptor antagonist for the treatment of obesity.

Nippon Shinyaku fell 4.4%, reflecting the downward revision of its forecast for the current fiscal year's interim consolidated net income by 570 million yen to 1.95 billion yen due to weakened demand and a hike in imported raw material costs. Eisai declined 2.4% without responding to the report that it is preparing to establish a wholly-owned subsidiary in Spain for the co-promotion of anti-Alzheimer's disease Aricept (donepezil) with Pfizer and the antiulcerant Pariet (rabeprazole) with Janssen-Cilag.