California Startup Taps Into Japan's IPO Market

A California-based pharmaceutical startup has turned public financing strategy on its ear by closing its first capital markets offering in Japan. Since early February, MediciNova has been trading on the Hercules Market of the Osaka Securities Exchange, which is the successor to NASDAQ Japan geared toward small and midsize companies.

With its successful $107.7 million offering of 30 million shares at $3.88 per share, MediciNova became the first American company to do its IPO in Japan, the first foreign company to trade on the Osaka exchange, and the only IPO to have closed in Japan by press time in early April.

Snyder also believes that IPO opportunities in Japan are available at a somewhat earlier stage in a company's development than they are in the United States.

"Analyst coverage is not as essential to success in [Japan's] market as it is at home," he says. "U.S. analysts focus on large companies, making it difficult for small companies to get any attention. The absence of analyst research doesn't have the same impact in Japan."

The process wasn't easy.

"We modified the American filing twice to satisfy the Japanese," Anderson recalls. "We were able to do it efficiently, however, largely because we held a major session in San Diego that everyone attended in person. With all the players in one room, things proceeded more quickly than if we had tried to do the same things over the telephone or by e-mail."


Julius Melnitzer

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