Stock Commentary - Europe - week to March 26

EUROPEAN: bourses were all significantly higher for the reporting period to March 26, helped to a large extent by positive US markets but, like the Dow Jones, took a dive on the last day. In FRANKFURT, there was a benefit for Merck KGaA, up 3.7% on the week, after US rival Amgen said it would stop a trial of its colon cancer drug Vectibix (panitumumab) which could have provided it with a larger patient population. This is a potential rival for the German firm's Erbitux (cetuximab; see also New York column and page 18). Bayer was up 3%, in a positive reaction to its deal with Swiss drug major Novartis over the multiple sclerosis drug Betaseron (interferon beta 1-b), giving the German group a US manufacturing base for a layout of around $110.0 million and settling outstanding legal action (see page 2). For its part, Novartis was virtually unchanged on the ZURICH bourse, rising just 0.3%. In BRUSSELS, shares of UCB fell 4.8%, on news of a likely delay in US approval for its Cimzia (certolizumab) in Crohn's disease (see page 21).

LONDON: prices for drug shares were mixed, with pharmaceutical majors AstraZeneca and GlaxoSmithKline falling 3.5% and 1.5%, respectively, following a downgrade from JP Morgan, which said both were overvalued, especially compared with Swiss group Roche. Elan and SkyePharma both rose 8.3% on the week, the latter after the drug development group said the Paul Capital refinancing and disposal of its injectable business have been completed. Elan improved after a report from Motley Fool on investing in Ireland, its home base, which included some encouraging remarks on the company's prospects based on its research pipeline.