Stock Commentary - Europe - week to Nov 5, 2007

EUROPEAN: bourses were all down significantly in the reporting period to November 5, pushed lower by the poor performance of US markets, with investors fleeing the banking sector as credit-crunch worries resurfaced. Pharmaceutical stocks were largely down, with the exception of PARIS, were both drug stocks tracked outperformed the CAC 40's 2.6% drop, with bioMerieux advancing 2.5% and Sanofi-Aventis up 2.0% on the week. The latter gained 2.2% on October 31, after reporting better-than-expected third-quarter results and raising its full-year guidance (Marketletter November 5). On the ZURICH exchange, which fell 3.3%, Actelion failed to hold on to a 5.6% gain on October 31, on rumors of a takeover bid from either France's Sanofi-Aventis or Swiss drug major Roche, ending the week down 1.5%. Roche gained 1.9% on the speculation but it, too, closed lower, falling 2.0%.

LONDON: share prices were weak, with the FTSE 100 falling 3.6% and most of the drug-oriented issues lower. Little Alizyme was one exception, rising 6.1%, lifted 8.7% on October 31 by new that JM Finn had initiated coverage of the stock with a buy rating and a 106 pence price target. The broker said it anticipated a series of announcements of deals over the next year which are not currently factored into Alizyme's price. Of the majors, AstraZeneca was down 3.3%, with some disappointment from its third-quarter results and news that US firm Cobalt Pharmaceuticals had applied to market a generic version of the Anglo-Swedish firm's blockbuster cholesterol-lowerer Crestor (rosuvastatin; see page 5). GlaxoSmithKline was not much better, down 2.6%. Israel's XTL Biopharmaceuticals has delisted in London.