JPMorgan, Goldman Raise Bets Against Eisai as Drug Loses Patent Protection

JPMorgan Chase & Co. and Goldman Sachs Group Inc. increased bets against Eisai Co. as the Japanese drugmaker’s best-selling medicine, the Aricept Alzheimer’s disease treatment, loses patent protection.

JPMorgan raised its short position for clients or itself to 3.7 percent of Eisai’s shares, worth $380 million, while Goldman Sachs boosted short holdings to $130 million, regulatory filings dated Dec. 13 showed. Morgan Stanley & Co. disclosed the third- biggest position in Eisai. Short-sellers typically sell borrowed shares, seeking to profit by repurchasing them at lower prices.

The transactions have made Eisai the most shorted Japanese stock, ahead of trading company Sumitomo Corp., which has $542 million of shares shorted by investors compared with its 1.49 trillion-yen ($17.8 billion) market value, according to data compiled by Bloomberg.

Eisai is trying to develop new products to buffer sales amid competition from cheaper copies of Aricept, the world’s top-selling pill to ease Alzheimer’s symptoms. U.S. regulators allowed India’s Ranbaxy Laboratories Ltd. last month to begin selling its generic version of Aricept.

The company’s shares gained 0.5 percent to 2,934 yen at the 3 p.m. close of trading on the Tokyo stock exchange. The shares have gained for three days, reducing their year-to-date loss to 14 percent.

Takeshi Shimizu, an Eisai spokesman, declined to comment.

JPMorgan’s sales of Eisai stock were reported by JPMorgan Whitefriars Inc., a London-based institutional investment management unit of the New York-based bank. JPMorgan spokesman Brian Marchiony declined to comment, as did Sumiko Iwadate, a spokeswoman for Goldman Sachs in Tokyo.

To contact the reporter on this story: Ben Sills in Madrid at bsills@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net; Jason Gale at j.gale@bloomberg.net

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