Stock Commentary - Europe - week to June 9, 2008

EUROPEAN: bourses, despite a positive start to the reporting period ended June 9, moved into reverse, especially ahead of the weekend, following Wall Street lower. A number of the drug stocks also went into decline, many having benefited last week from good trials presented at the American Society of Clinical Oncology meeting (Marketletter June 9). In FRANKFURT, SYGNIS was the best performer, rising 6.2% against a 2.8% market downturn, helped by news of its acquisition of US firm Amnestix (see page 4). The only tracked faller was Bayer which failed to respond to positive ASCO presentations. In ZURICH, there was a 7.5% rise for Speedel, which was boosted by data published in the New England Journal of Medicine showing that the first-in-class direct renin inhibitor Rasilez (aliskiren), known as Tekturna in the USA, may have potential kidney-protective benefits that are independent of its already proven ability to provide powerful blood pressure reductions. The drug is being co-developed by Swiss major Novartis, which saw its share price fall 5.1%, on the news that it is acquiring US firm Protez (Marketletter June 9).

LONDON: saw the FTSE 100 fall 2.2%, and nearly all the drug stock were down. SkyePharma had another miserable week, declining a further 16.1%. The firm is in the process of renegotiating a bond issue maturing in 2009, but needs to reassure investors with new data on its Flutiform (fluticasone and formoterol) asthma drug before it signs any deal. The only gainer was York Pharma with a 1.7% rise. Antisoma was down 3.3%, as investors saw its takeover of US firm Xanthus (Marketletter May 26) as an indication that it is no longer an acquisition target itself.