Stock Commentary - Europe - week to March 24, 2008

EUROPEAN: bourses, mostly with just three reporting session because of the extended four-day Easter holiday period, ended the week to March 24 with gains. The best showing came from ZURICH, where the SMI advanced 3.5% and Novartis outperformed with a 7.1% rise, while fellow drug major Roche achieved a rise of just 2.4%. BRUSSELS saw a sharp 10.7% drop for UCB, which fell on the news that the firm had to recall all batches of its Neupro (rotigotine) transdermal patch for the treatment of Parkinson's disease in the USA (see page 19). Commenting on the European pharmaceutical sector's outlook, analysts at Lehman Brothers noted that the major economies are facing, or are already in, a consumer-driven recession, which they see as an important factor for the industry, but are surprised by its relative lack of defensive performance.

LONDON: share prices were mixed, with the FTSE 100 up just 1.5%. Leading the risers was Ireland-based Elan, which leapt 22.3% over the reporting period, after the Irish Financial Services Regulatory Authority announced it was investigating rumor-spreading designed to drive down certain stocks lower. Elan's share price leapt 19% on March 20 alone. Drug major GlaxoSmithKline was up 5.2%, despite the negative news on its oral breast cancer drug Tyverb (lapatinib), with its European Union approval now being delayed while the Commission considers new data on liver side effects (see page 18). Fellow major AstraZeneca jumped 7.5% in the holiday-shortened week, with the only significant news being a second deal with Silence Therapeutics (Marketletter March 24). Shire gained 4.2% on continued takeover speculation (see page 7).