Muddy Waters Shorts Japan Biotech PeptiDream; Shares Slump
Muddy Waters Shorts Japan Biotech PeptiDream; Shares Slump
(Bloomberg) -- Muddy Waters said it’s short Japanese biotech stock PeptiDream Inc., sending the company’s shares sliding.
PeptiDream fell as much as 5.5% in Tokyo trading Thursday after the short seller questioned the level of activity at the company’s drug development partnerships with pharmaceutical companies. The stock ended the day 4% lower.
PeptiDream, in a statement after the market close, refuted contents of the short seller’s report, saying it holds a “completely different view” from Muddy Waters. The company said its 101 programs are all active programs and that they don’t include dead or dormant ones.
The biotech firm, based in Kanagawa outside Tokyo, is developing a peptide system to facilitate the discovery and testing of new drugs in a range of diseases from cancer to neurological conditions.
PeptiDream has “really cool” technology, Muddy Waters said in the report. “But we believe the coolness of PeptiDream’s technology amounts to at best a very small business opportunity.”
The firm is part of a handful of Japanese biotech ventures that have grown into billion-dollar companies, which also includes Sosei Group Corp., the drugmaker that now accounts for more than 7% of the Mothers Index of smaller shares.
Muddy Waters, led by Carson Block, is known in Japan for its short report on motor-maker Nidec Corp. in 2016. Nidec said the report was almost entirely wrong. Its shares rose in the month after it was published.
PeptiDream has climbed about 18% this year even after Thursday’s decline. Muddy Waters didn’t provide a target price on the stock.
To contact the reporters on this story: Min Jeong Lee in Tokyo at mlee754@bloomberg.net;Lily Nonomiya in Tokyo at lnonomiya@bloomberg.net
To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Tom Redmond, Teo Chian Wei
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