Stock Commentary - Europe - week to Aug 25, 2008

EUROPEAN: bourses witnessed some hectic trading sessions during the two-week reporting period to August 25, which also saw light trading because of the summer holiday season in the region. All the markets tracked ended with significant losses, with the worst hit being Germany, Italy and Sweden, where the main index in all three fell 4.7% overall. In PARIS, Sanofi-Aventis outperformed the CAC 40's 4% drop, dipping just 2.1%. The stock was not helped by a note to clients from analysts at Lehman Brothers suggesting that, as it has risen 17.6% since their last upbeat stance on the firm in June, this was the time to take profit, particularly in the face of generic and new product competition uncertainty. FRANKFURT saw a strong 15.5% leap for Evotec, on no particular news, while MorphoSys was the worst performer, dropping 5.5% after WestLB analysts in Germany cut their rating on the stock from buy to add. Stada Arzneimittel slumped 9.3% early in the reporting period, after the company cut its earnings forecast, but then moved higher on rumors that Israel's Teva was viewing it as a takeover target (see page 2).

LONDON: share prices fared rather better than their mainland European counterparts, with the FTSE 100 dipping only 0.7%, but with some wild activity in the pharmaceutical sector. Little Protherics rocketed a whopping 84.3% overall, surging nearly 44% on August 14 alone, after the firm said it had been approached by several companies interested in buying it. Elan leapt 24%, largely as a reaction to the news that its multiple sclerosis drug Tysabri (natalizumab) was unlikely to be taken off the market. Phytopharm was another big riser, up 22.6%, with no news attached.