Stock Commentary - Europe - week to April 23, 2007

EUROPEAN: bourses put in a mixed performance in the reporting period to April 23, although most ended higher overall, helped by a stellar showing on April 20, as well as merger and acquisition rumors and the start of a strong first-quarter reporting season. ZURICH saw Roche outperform the SMI, which was up 1.8%, with the firm's stock rising 4.8% after posting better-than-expected results (Marketletter April 23). Actelion was the worst performer, falling 5.8% when the firm reported deepening losses, due to acquisition charges (see page 10). There was no apparent news linked to Evotec's 10% slide on the FRANKFURT exchange, or for SYNGIS' 6.4% rise. Merck KGaA, however, was impacted by a reported loss, attributed to its acquisition of the Swiss Serono firm (see page 11). Paris saw underperformance from both stocks tracked, with bioMerieux falling 3.3% and Sanofi-Aventis down 2.0%. UCB gained 2.2% on a flat BRUSSELS market, despite announcing a delay in the launch of its urinary incontinence drug fesoterodine.

LONDON: share prices dipped over the week, while drug stocks were mixed. The sector benefited to some extent on April 19, from the news that US drug major Schering-Plough had posted stronger-than-expected results, but these gains failed to be retained. AstraZeneca was down 1.0%, having fallen 4.1% on the last reporting day, when the company announced its decision to acquire US firm MedImmune at what many thought was a hefty price of $15.6 billion (see pages 2 and 3). GlaxoSmithKline also fell 1.0%. Vernalis leapt 11.9% on a buy rating from analysts at Goldman Sachs, who expect positive near-term news flow from the firm.