Stock Commentary - Europe - week to May 26, 2008

EUROPEAN: bourses, after a strong showing the previous week, went into retreat in the reporting period to May 26, as worries about supply versus demand pushed oil prices ever higher. All the major markets were down substantially. With most of the first-quarter reporting season out of the way, there was little to motivate investment in the drug sector. However, in ZURICH, little Speedel outperformed the market's 5.3% drop, with a 2.1% decline after posting strong figures for the first three months (see page 6). Drug majors Roche and Novartis fell 4.7% and 3.7%, respectively, while Actelion suffered a bout of profit-taking, falling 5.9% on the week. Merck KGaA was the only one to see a real upturn on the FRANKFURT bourse, rising 4.8% against a 3.8% decline in the Xetra Dax. Reportedly, investors were buying the stock ahead of the American Society of Clinical Oncology meeting, where it was hoped that the firm, with US partner ImClone Systems, would present data showing additional benefits in colon and lung cancer for its already-marketed Erbitux (cetuximab), which generated first-quarter revenues of 145.0 million euros ($228.8 million; Marketletter May 5). Stada Arzneimittel was the worst performer, with a 6.1% decline.

LONDON: share prices in the drug sector were mixed. SkyePharma fell 6.7%, despite an initial rise on announcing a successor for its chief executive (Marketletter May 26). Antisoma fell 5.3% on the news that it is buying US firm Xanthus and raising an additional L20.9 million ($41.4 million; Marketletter May 26). Pharmaceutical majors AstraZeneca and GlaxoSmithKline both retreated, falling 4.8% and 2.8%, respectively.