Stock Commentary - Europe - week to August 6, 2007

EUROPEAN: bourses, unlike New York, started the reporting week to August 6 strongly, breaking a five-day losing streak, but then went into reverse on credit worries, with nearly all seeing substantial losses over the period. In ZURICH, Actelion regained 7.6% after significant recent falls, while Speedel slumped 9.5%. Sanofi-Aventis outperformed the PARIS market, seeing a 0.6% decline, after the company reported second-quarter figures hit by generic competition and despite announcing a 3.0 billion-euro ($4.14 billion) share buyback program (Marketletter August 6). In the BRUSSELS exchange, UCB was strong, with a 7.5% gain, helped by a positive new report on the company from Research and Markets.

LONDON: did a little better than the rest of Europe, with the FTSE 100 down just 0.3% on the week. Drug and biotechnology stocks were very mixed. although strong on the last day when they encountered defensive buying. The worst performer was SkyePharma, with an 18.2% fall, after it was revealed that US approval of its asthma drug Flutiform (formoterol and fluticasone) could be delayed until the second half of next year (see page 19). Antisoma was also sharply lower, falling 15.5% on the week, despite announcing that it had started Phase II development of its acute myeloid leukemia drug AS1411 (see page 21). Phytopharm benefited from positive development news with its Myogane, an orally-active neutrophic factor inducer (Marketletter August 6). Drug major GlaxoSmithKline rose 5.3%, on positive investor reaction to the news last week that its diabetes drug Avandia (rosiglitazone) could stay on the US market, albeit with stronger warnings.