Stock Commentary - Europe - week to Nov 17, 2008

EUROPEAN: bourses saw very little upside in the reporting period to November 17, with FRANKFURT the worst performer for a second week, as the Xetra Dax plunged 9.3%. Big Pharmas Bayer and Merck KGaA outperformed, though still falling 5.3% and 3.6%, respectively. Bucking the trend was SYGNIS, which leapt 11.5%, despite posting a doubling of its net loss for the second fiscal quarter (see page 10). STADA Arzneimittel was down 4.3%, even though it reported an 18% jump in nine-month profit (see page 5). While most of the drug majors were lower on the week, they did better than their domestic markets, with investors seeing some signs of their defensive nature. One exception was on the BRUSSELS exchange, where Solvay plunged 9.6% on the news that it is discontinuing R&D activities for its antiobesity compound SLV319, a drug in the same selective cannabinoid type 1 antagonists class as those recently abandoned by the USA's Pfizer and France's Sanofi-Aventis (Marketletter November 10 and page 28 this issue). The French drug major dipped just 1.9% on the PARIS Bourse, where the CAC 40 dropped 9.2%.

LONDON: share prices followed the negative trend of the rest of Europe, but this market produced by far the biggest loser, in the form of Phytopharm, which nose-dived 43.2% after Unilever pulled out of its development agreement on the weight-loss Hoodia plant extract (see page 10). Protherics, up a further 14.2%, continues to see active trading, despite being the subject of a takeover deal with BTG, which is expected to complete by December 4 (Marketletter September 22). Shire was among the drugmakers viewed as a defensive play, rising 4.8% on the week.