European drugmakers ahead of US group, say analysts

The 18% rise in second-quarter 2006 turnover posted by Swiss drug major Novartis has confirmed for many pharmaceutical sector analysts their belief that European drugmakers are doing better than the Americans - at least for the moment. Analysts at broker Dresdner Kleinwort say that, in the past three months, European drugmakers have achieved results markedly better than the market as a whole.

The drug sector is providing comfort for investors with high levels of profitability. UBS has noted, for example, that Novartis' pharmacy division margin has remained very high at 32% (see page 3).

Meanwhile, the profits of the other European majors - such as Roche, GlaxoSmithKline, AstraZeneca and Sanofi-Aventis - are expected to achieve average growth of 16% for second quarter, according to Deutsche Bank, with a slight dip of 0.4% on average for the US leaders.