Stock Commentary - Europe - week to Jan 14, 2008

EUROPEAN: bourses were generally lower in the reporting period to January 14 but, having failed to benefit from earlier investors moves into defensive issues, Big Pharma came into its own, with ZURICH seeing a 5.9% rise for Roche and 3.5% for Novartis on January 8, leaving the stocks 5.8% and 2.9% higher, respectively, over the week, while little Actelion was the star with a 12.5% gain on no particular news. PARIS saw strong buying in Sanofi-Aventis, which was up 3.7% against a 0.9% fall in the CAC 40. However, FRANKFURT was least impacted by the defensive drug stock buying, although Merck KGaA ended the week 4.6% higher, having risen 5.3% on January 9. Bayer rose 2.3% but ended the week just marginally higher, up 0.1%. Moreover, on the last reporting day nearly all the European majors saw a decline, as sector players took in profits and analysts downgraded these stocks.

LONDON: share prices moved up on the first day but then moved into reverse, dragged lower by poor figures coming out of the retail sector. Drug stocks were mostly higher, with the majors reaping the benefit of investors seeking defensive plays. The best performance, however, came from little Protherics, which leapt on the news that, with US partner Advancell, it had started enrollment of a Phase I/II clinical trial for Acadra (acadesine) in the treatment of B-cell chronic lymphocytic leukemia, leaving the stock up a whopping 21.5% for the week (page 22). AstraZeneca led the sector higher on January 9, ending the week with a 6.4% gain, while GlaxoSmithKline finished just 2.5% higher and Shire was up 2.9% despite falling 3.2% on the last day.