Stock Commentary - Europe - week to May 1, 2006

EUROPEAN: bourses were nearly all lower in the reporting period to May 1, with the last day a holiday in most countries. Although almost over for the US drug majors, European pharmaceuticals companies are now in full swing in reporting first quarter financial results which, while many were strong, have failed to boost share prices, as investors took profits ahead of the break. In FRANKFURT, Schwarz plunged 8.7%, despite posting better-than-expected figures (see page 7). Merck KGaA's 51% net profit rise did, however, lead to a share hike of 3.5% (see page 5). Bayer, up 3.3%, gained from the news of US orphan designation for its new cancer drug and positive first quarter results (see page 5). In AMSTERDAM, Akzo Nobel fell 6.3% after reporting an 11% decline in first-quarter income (see page 10). BioMerieux managed a 2.8% rise on the PARIS bourse, where the CAC 40 was down 0.6% and Sanofi-Aventis declined 0.1% ahead of their results. In Zurich, Roche was up 1.0%, after beating forecasts with its first quarter results (see page 4).

LONDON: share prices were mostly lower, with the FTSE 100 falling 1.2% over the week. GlaxoSmithKline posted what were described by analysts as "excellent results" (see page 2,) and finished the week with a 5.3% gain, while AstraZeneca's 33% rise in profits, although well ahead of expectations, saw its stock fall 1.3%, despite an initial rise of 2.1% on releasing the figures. The star of the week was Phytopharm, which leapt 16.5%, having risen 13.2% the previous week after its R&D pipeline review (Marketletter May 1). Analysts see the firm as now making progress on the development of its Hoodia gordonii extract.