Stock Commentary - Europe - week to July 28m 2008

EUROPEAN: bourses had a volatile reporting period to July 28, lurching up and down mostly in concert with New York. Most of the senior markets were down week-on-week, except the Swiss and Italian, with the latter barely moved, and Recordati down 3.8% ahead of results. In ZURICH, there was a significant 9% gain for Roche, which bounced back from the previous week's fall resulting from the Swiss drug major's bid to acquire the balance of US biotechnology affiliate Genentech, at a price which most observers feel will have to be increased (Marketletter July 28). Actelion advanced 7.4% on posting improved second-quarter results (see page 10). FRANKFURT saw a further 6% gain for MorphoSys and Bayer advanced 4.3%. Stada Arzneimittel slumped 27.8% after the company issued a sales and profit warning for the full year, citing difficulties in European pharmaceutical markets.

LONDON: saw mixed movements among drug stocks, with some dramatic story-specific changes. Biotechnology firm Acambis rocketed 65.6% on the news of a takeover bid from French drug major Sanofi-Aventis (which gained 2.9% on the Paris bourse), valuing the the UK firm at 190 pence per share, a premium of 65.2% on its trading just ahead of the announcement. Sinclair gained a substantial 29%, after the company provided a pre-close trading update suggesting that full-year sales would rise 30% (see page 10). SkyePharma moved up 11.1% on positive results for its asthma treatment Flutiform (fluticasone/formoterol: Marketletter July 28), while Alizyme continued its recent descent, sliding a further 48.4%, after its ulcerative colitis drug failed to meet a key efficacy endpoint (see page 28).