Stock Commentary - Europe - week to June 30, 2008

EUROPEAN: bourses had another miserable reporting week to June 30, with much the same worries - the economy, oil prices and corporate earnings outlooks - impacting investor sentiment. BRUSSELS saw a sharp 9.6% decline for Solvay, after it was revealed that Par Pharmaceutical and Watson Pharma had received US Food and Drug Administration clearance for generic versions of the Belgian firm's Marinol (dronabinol), a drug used to treat chemotherapy-induced nausea which has annual US sales of around $190.0 million. Roche advanced 6.2% in ZURICH, notching up 5.1% on the last reporting day due to good clinical trial results with its cancer drug Avastin (bevacizumab; see page 28). Fellow drug major Novartis advanced 4.0% following an upgrade to neutral from analysts at Exane BNP but Actelion declined 5.1%, despite gaining approval for wider use of Tracleer (bosentan; see page 19) in Europe.

LONDON: saw the FTSE 100 drop just 0.7% on the week, but the index is down 14% since the start of the year. Drug stocks wee mainly in the red, with little Alizyme bucking the trend for a 5.1% rise, boosted by news of its licensing deal for Colal-Pred (prednisolone metasulfobenzoate; see page 2) with Norgine, which will see the UK firm getting an upfront 42.7 million euros ($67.4 million). Sinclair Pharma, on the other hand, plunged 9.9%, despite signing a marketing deal (see page 28). Drug majors AstraZeneca and GlaxoSmithKline dipped 0.7% and 0.8%, respectively, in line with the overall market, while Elan trod water after its previous week's spectacular 27.6% rise on a positive take towards a Phase II study of bapineuzumab with Wyeth.