UPDATE 1-Japan drug firm Otsuka to go public -sources

* Market capitalisation seen at around $11 billion

* Nomura to underwrite public offering

* Japan's IPO market more than halved in 2009 to $637 million

* Largest IPO in Japan drug sector in at least a decade (Adds background on recent IPO)

By Ritsuko Shimizu and Emi Emoto

TOKYO, Jan 28 (Reuters) - Otsuka Holdings Co Ltd, a maker of drugs and food products, is preparing to go public this summer, two sources told Reuters -- a move that may make it Japan's fourth biggest drug firm by market value.

Otsuka Pharmaceutical, the biggest unit of the holding firm, has developed schizophrenia drug Abilify and teamed up with Bristol-Myers Squibb (BMY.N) to sell it in the United States and some other markets.

The company, more diversified than other drug makers, also sells sports drinks, instant meals and skincare products. Its food unit sells Crystal Geyser bottled water in Japan.

The deal is expected to give Otsuka a market capitalisation of around $11 billion, the sources said, placing it behind Takeda Pharmaceutical (4502.T), Astellas Pharma (4503.T) and Daiichi Sankyo (4568.T) and putting it roughly on par with Eisai Co Ltd (4523.T)

The sources were not authorised to speak on the record about the matter. Otsuka Holdings spokesman Hideki Shirai said the company does not have a plan to list its shares on an exchange.

Otsuka's stock listing would -- along with Dai-Ichi Mutual Life Insurance's planned initial public offering in April -- give a needed boost to Japan beleaguered IPO market, which shrivelled last year in the wake of the global economic slowdown.

The value of listings fell to 57.5 billion yen ($636.5 million), less than half of 2008 levels, with only 20 firms making their debut, compared with 49 in 2008.

It would also be the biggest IPO in the Japanese pharmaceuticals sector in at least a decade, according to Thomson Reuters data.

Nomura Securities (8604.T) will be the lead underwriter for Otsuka's offering, the sources said.

Otsuka had sales of 955.9 billion yen ($10.6 billion) in the past financial year, which would make it Japan's third-biggest pharmaceutical firm ahead of Daiichi Sankyo in revenue terms. It booked an operating profit of 91.5 billion yen and a net profit of 47.1 billion yen.

It had total assets worth 1.3 trillion yen and net assets worth 863.8 billion yen, the company said. ($1=90.30 Yen) (Writing by Yumiko Nishitani; Editing by Edwina Gibbs)