EUROPEAN: bourses were all significantly lower in the reporting week to May 15. Although stocks started the period in positive mode, it was all seriously downhill for the rest of the week, as a strong euro put pressure on export-oriented issues, along with rising oil prices and a poor showing in New York. Pharmaceutical and biotechnology stocks were mostly lower, despite analysts at Lehman Brothers saying that the case for overweighting in European drug stocks is strong and the sector is cheaply valued. FRANKFURT saw all but Schering AG fall on the week, but even that company hardly moved. PARIS witnessed bioMerieux slump 6.4% but Sanofi-Aventis, with a 1.8% decline, outperformed the CAC 40's 4.3% fall. Lehman's analysts have upgraded Sanofi-Aventis to overweight, but note that there still exists risk regarding the US Federal Trade Commission's decision on the firm's blood thinner Plavix (clopidogrel) patent.
LONDON: share prices had a rough ride, with the FTSE ending the week 3.7% lower and, among drug stocks, all but Cambridge Antibody Technology and Elan, which rose 6.5 after posting narrower losses (Marketletter May 15) down. CAT was the big story, leaping 67.1% after AstraZeneca, 2.6% lower, said it would buy the remaining 80.1% of the firm it does not already own (see page 3). The offer of 1,320 pence a share is a premium of 66.9% to CAT's closing price ahead of the news, which came on May 15, and the question in investors' minds now is whether a higher bid for the firm might emerge. Also, after this reporting period, the UK's Office of Fair Trading said it would be looking into the situation to ensure that it did not breach competition regulations.
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Stock Commentary - Europe - week to May 15, 2006
EUROPEAN: bourses were all significantly lower in the reporting week to May 15. Although stocks started the period in positive mode, it was all seriously downhill for the rest of the week, as a strong euro put pressure on export-oriented issues, along with rising oil prices and a poor showing in New York. Pharmaceutical and biotechnology stocks were mostly lower, despite analysts at Lehman Brothers saying that the case for overweighting in European drug stocks is strong and the sector is cheaply valued. FRANKFURT saw all but Schering AG fall on the week, but even that company hardly moved. PARIS witnessed bioMerieux slump 6.4% but Sanofi-Aventis, with a 1.8% decline, outperformed the CAC 40's 4.3% fall. Lehman's analysts have upgraded Sanofi-Aventis to overweight, but note that there still exists risk regarding the US Federal Trade Commission's decision on the firm's blood thinner Plavix (clopidogrel) patent.
LONDON: share prices had a rough ride, with the FTSE ending the week 3.7% lower and, among drug stocks, all but Cambridge Antibody Technology and Elan, which rose 6.5 after posting narrower losses (Marketletter May 15) down. CAT was the big story, leaping 67.1% after AstraZeneca, 2.6% lower, said it would buy the remaining 80.1% of the firm it does not already own (see page 3). The offer of 1,320 pence a share is a premium of 66.9% to CAT's closing price ahead of the news, which came on May 15, and the question in investors' minds now is whether a higher bid for the firm might emerge. Also, after this reporting period, the UK's Office of Fair Trading said it would be looking into the situation to ensure that it did not breach competition regulations.
This article is accessible to registered users, to continue reading please register for free. A free trial will give you access to exclusive features, interviews, round-ups and commentary from the sharpest minds in the pharmaceutical and biotechnology space for a week. If you are already a registered user please login. If your trial has come to an end, you can subscribe here.
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