Stock Commentary - Europe - week to April 13, 2009

EUROPEAN: bourses were mostly slightly higher in the Easter holiday-shortened reporting week to April 13, but stocks still had a  volatile period in the three trading days. BRUSSELS saw a further sharp  rise in Solvay, which appears to have effectively put its pharmaceutical  business up for sale, with talk of this being via an auction. The stock  rose 12.2% after a 15.3% gain the previous week. FRANKFURT saw most of  the drug stocks followed move higher, except Merck KGaA, which fell  1.9%, following the news that Roche's US subsidiary Genentech is  withdrawing its psoriasis drug Raptiva (efalizumab), for which the  German firm is a licensee, from the market due to fatal cases of  multifocal leukoencephalopathy (see page 19). The news had little impact  on Roche in ZURICH, where it diped just 0.4%. In PARIS, Sanofi-Aventis  underperformed the market's 1.5% rise, advancing just 0.9%, despite  becoming the subject of a strong buy recommendation from analysts at  Zacks. Sanofi was also in the news, buying the Brazilian generics  business Medley (see page 3) and the US biotechnology firm BiPar (see  page 4).

LONDON: share prices in the drug sector saw majors AstraZeneca and  GlaxoSmithKline down 2.5% and 2.0%, respectively, and the third biggest,  Shire, dipped 0.9%, while most of the smaller firms saw strong gains. AZ  was impacted to some extent by an ambiguous response from a US Food and  Drug Administration panel on its Seroquel (quetiapine fumarate; see page  19). BTG moved up 5.7%, after the firm updated investors, saying it is  on track for savings following its acquisition of Protherics  (Marketletter April 13). Vernalis leapt 14.6% on no specific news.