Stock Commentary - Europe - week to Nov 24, 2008

EUROPEAN: bourses were all lower in the reporting week to November 24, though losses were mostly small and certainly not in the same league as the previous week. The exception was BRUSSELS, which fell 10.1%, but UCB outperformed significantly, with a decline of just 2.3%. In PARIS, there was a 4.3% downturn for Sanofi-Aventis, despite the drug major getting an overweight rating from analysts at Morgan Stanley, who have a share price target of 50 euros. The view is that the firm has further near-term cost reductions coming and a new chief executive, in the shape of former GlaxoSmithKline North America Pharmaceuticals president, Chris Viebacher, news which, when first announced, saw the French group's stock leap to 50.50 euros (Marketletter September 15). MILAN saw Recordati advance 4.5%, lifted by the news that it had filed for European marketing approval of its benign prostatic hyperplasia drug silodosin (see page 28).

LONDON: share prices just bucked the European trend, with the FTSE 100 rising 0.5%, though drug issues were mainly lower. Investors were pleased with the news that Vernalis had appointed two former executives of Acambis (now owned by Sanofi-Aventis) to head the UK firm (Marketletter November 24), as well as its initiation of a Phase IIb study of its diabetic neuropathic pain drug candidate V3381, pushing it share price up 16.5%. News of the US approval of Promacta (eltrombopag) had little impact on GlaxoSmithKline (see page 23), down 3.9%, and AstraZeneca fell 12.0% on mixed trial results with Zactima (vandetanib; Marketletter November 24) and generic competition for Pulmicort (budesonide; page 28).