Retina Institute Japan K.K., which employes Nobel Prize-winning stem-cell technology to treat eye diseases, plans to sell a stake in itself to a group of Japanese companies next month, ahead of a possible initial public offering in five years.
The company will raise ¥1 billion from the sale to fund development of a treatment for age-related macular degeneration — a leading cause of blindness in the elderly — using technology developed by the Riken research institute, Retina Chief Executive Officer Hardy Kagimoto said.
After raising about ¥32 billion so far from investors, Retina is developing technology from a discovery that jointly won Kyoto University professor Shinya Yamanaka the Nobel Prize in physiology or medicine in October for turning ordinary skin cells into induced pluripotent stem (iPS) cells.
“The development of retina treatment with iPS cells can lead to development of the cell-utilized therapies for a wide range of diseases,” said Akitsu Hotta, an assistant professor at Kyoto University who studies stem cells. He said that Retina’s commercialization of the technology “will be a big milestone.”
Fukuoka-based Retina estimates the potential market for its treatments at ¥2.1 trillion.
The sale of a 3 percent stake values Retina at ¥33 billion. Dainippon Sumitomo Pharma Co., which paid ¥1.5 billion for 5 percent of Retina, jumped 8 percent in Tokyo trading the day after that deal was announced in March.
Stocks of Shin Nippon Biomedical Laboratories Ltd., which said April 9 that it plans invest ¥300 million in Retina, and Tella Inc., which is buying ¥100 million of shares in the company, have more than quadrupled over the past six months.
“Investors are rushing to buy shares of companies that are involved in stem-cell therapy and treatment technologies,” said Tsutomu Yamada, an analyst at Kabu.com Securities Co.
Kagimoto, the chief executive officer, declined to name the companies participating in the current round of fund-raising and said he has no plans to sell shares to local or foreign private equity firms.
Retina is targeting an IPO in five years in both Japan and the U.S. to finance commercialization of the treatment, according to Kagimoto, 36. The company will conduct a domestic clinical trial for treatment for age-related macular degeneration, and similar testing in the U.S., he said.
Yamanaka’s breakthrough, first announced at in 2006, stunned the world by showing that even as cells of the body age, they retain in latent form the unlimited potential they had as embryonic cells.
Researchers from Riken in January reported they have succeeded for the first time in creating cancer-specific immune system cells from iPS cells, the institute said in a Jan. 4 statement. This could potentially serve as cancer therapy in the future.
“Advanced medical technologies around iPS cells would be one of Japan’s vital competitive edges in the next decade or two,” Kagimoto said.