Bubbling up in Japan

Japan's biotech stocks surge, question is how long it can continue

Japan's biotech stocks have benefited from a spike in interest from retail investors driven in part by last October's Nobel Prize for a Kyoto University stem cell researcher. Company executives who spoke with BioCentury are wary that there could be an equally precipitous outflow - indeed, there are signs the rally is ebbing - and are mulling raising funds while the prices are still good.

Since the beginning of the year, Japanese biotechs have seen their shares rise 71% based on an equal price-weighted basis (see "Japanese Biotech Performance," A11).

This compares to an 8% gain by the BioCentury 100, an index of the top 100 U.S.-listed biotechs by market cap; a 7% gain by the Nikkei 225; and a 30% gain in the Mothers index of high-growth and emerging stocks on the Tokyo Stock Exchange.

Shares prices for two companies have already doubled since the beginning of the year, including NanoCarrier Co. Ltd., which was valued at over $1 billion for several days in late January.

The cancer company has no marketed products. NK105, its most advanced product, is in Phase III testing for breast cancer. The product, which comprises micellar nanoparticles containing paclitaxel derivatives, is partnered with Nippon Kayaku Co. Ltd.

The surge began in November, after Kyoto University Professor

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