Stock Commentary - Europe - week to mar 30, 2009

EUROPEAN: bourses were all sharply lower, falling first on profit-taking then plunging dramatically on the last reporting day of the week to  March 30, reacting to negative corporate news and Washington DC's  decision not to accept restructuring plans for the motor industry and  Spain announcing plans for its first bank rescue. Drug stocks were also  mainly in decline. Though lower, drug issues mostly outperformed the  ZURICH exchange's 3.8% fall. Basilea dropped 7.3%, with news that the  company had filed for market approval in 13 additional European Union  countries plus Norway and Iceland for its eczema product Toctino  (alitretinoin) coming too late to impact the shares' movement. Of the  majors, Roche was up 2.7% while Novartis fell 3.2%. Against a 5.2% fall  in the PARIS CAC 40 index, Sanofi-Aventis inched up 0.3%, despite  Moody's Investor Services lowering its rating to stable from positive,  expecting the drug major to make acquisitions in order boost its R&D  pipeline. Merck KGaA outperformed in FRANKFURT, up 1.9%, while Bayer  fell 4.1% on no particular news.

LONDON: saw extreme divergence in drug stocks. GW Pharma resumed its  upward trend, advancing 25.9%, still buoyed by good Phase III trial  results with its cannabis-based drug Sativex (Marketletter March 23).  AstraZeneca was up 3.4%, helped by a slew of good clinical results  presented at the American College of Cardiology meeting (page 21), while  fellow major GlaxoSmithKline rose 2.9% on the week, despite falling at  the start of the period on speculation that it was bidding for Allergan  (Marketletter March 30). Elan leapt 25.9% on talk that it was a target  for Denmark's Lundbeck (page 2).