ReproCell Set to Quadruple From IPO on Stem-Cell Optimis

ReproCell Inc. (4978), a stem-cell medical research company, is heading for the biggest opening jump for a Japanese initial public offering in nine years.

Shares of the biotech company were untraded a second day after debuting on Osakas JASDAQ exchange yesterday. The stock was bid at 14,180 as of 1:09 p.m. in Tokyo and is poised to open trading 343 percent higher than its IPO price of 3,200 yen. Buy orders outnumbered sell orders by about 4-to-1.

Founded in 2003, ReproCell was the first company licensed to generate induced pluripotent stem cells, or iPS cells, according to the company website. Kyoto University professor Shinya Yamanaka won a Nobel Prize for medicine in October after discovering a new way to transform ordinary skin cells into iPS cells. Riken, a state scientific research institute, said the cells have potential for treating cancer.

Investors are focusing on the dream, said Toshiaki Iwasaki, an analyst at Mito Securities Co. Ltd. They are buying because of optimism about iPS. Investors are also hopeful that ReproCells technology will be used by cosmetic companies as well as pharmaceutical firms.

If the shares open at the current price, this will be the largest surge on a Japanese trading debut of greater than $10 million in value since Message Co. soared 426 percent in 2004, according to data compiled by Bloomberg.

The Japanese government yesterday approved the worlds first clinical research using iPS cells, according to the Nikkei newspaper. Riken and the Foundation for Biomedical Research & Innovation won clearance from the Health Ministry and plan to use iPS cells for retinal regeneration, according to the report.

Health-care companies also surged this year after Prime Minister Shinzo Abe pledged to reform the Pharmaceutical Affairs Law to facilitate biotechnology research, including exploring stem cells that can be reprogrammed for use in tissue engineering and regenerative medicine.

Shin Nippon Biomedical Laboratories Ltd. (2395) surged 315 percent this year for the second-biggest increase on the Tokyo Stock Exchange Mothers Index of smaller firms. CanBas Co., a maker of cancer medications, has soared as much as 728 percent in the same span.

Nipro Corp. (8086), which owns 12 percent of ReproCell, surged 19 percent on May 27 after the listing was announced. Nipro has since fallen 17 percent.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

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ReproCell Set to Quadruple From IPO on Stem-Cell Optimis