Stock Commentary - Europe - week to mar 2, 2009

EUROPEAN: bourses experienced another volatile reporting week to March  2, as banking issues and the economy continued to take their toll on  stock markets. However, the drug sector suffered a double-whammy: the  unveiling of US health care reform plans (see page 14), which are seen  as strongly negative for  pharmaceutical companies. There seemed to be  little positive company-specific news to counter the downturns. ZURICH  saw a 13.9% decline for drug major Novartis, after the firm warned  first-quarter earnings will be impacted by the strength of the US  dollar. Roche did not fare much better, falling 13.4% on the week.  Solvay dropped 8.4% in BRUSSELS, after posting a 46% decline in 2008  profits (Marketletter March 2), while UCB managed to recoup some of its  losses following release of its results, with 2008 profits down 74% (see  page 5). PARIS witnessed a 19.9% slump for Ipsen, which posted flat  profit earnings for 2008 and forecast a difficult period ahead (see page  7). Sanofi-Aventis underperformed the market's 5.4% fall with an 8.5%  decline, impacted by the US news.

LONDON: saw most of the drug stocks followed down week-on-week,  although GW Pharmaceuticals continued to benefit from strong clinical  findings with its cannabis-based drug Sativex (Marketletter March 2),  rising another 8.6%. Drug majors AstraZeneca and GlaxoSmithKline felt  the most impact from the trans-Atlantic news, falling 6.4% and 7.8%,  respectively, with AZ admitting that its antipsychotic drug Seroquel  (quetiapine fumarate) was likely to take a hit of "several hundred  million dollars" on US sales due to mandated rebates and allegations it  suppressed data on the drug (see page 7).