Stock Commentary - Europe - week to October 22, 2007

EUROPEAN: bourses, though fairly stable in the early part of the reporting week to October 22, tumbled for the three last days, with all down significantly on the week. Sentiment was not helped by the October 19 meltdown on Wall Street. ZURICH, where drugmakers had started reporting within the review period, saw Roche decline 6.6%, after its nine-month figures missed forecasts. (Marketletter October 22). Novartis was also lower, falling 3.3%, despite strong figures, because the firm identified problems in its core pharmaceuticals business (see page 6). The real casualty, however, was Actelion, which plunged 20.4%, after reporting a downturn in sales of its key product, Tracleer (bosentan: see page 11). FRANKFURT saw a mixed performance in the drugs arena, with only Bayer, up 1.2%, and Stada Arzneimittel, up 1.8%, seeing a rise. Both companies benefited from recommendations for product approvals in the European Union (see page 18). Merck KGaA was down 1.0% ahead of reporting results (see page 26).

LONDON: share prices were also weak, with the FTSE 100 down 2.8% overall. The biggest faller was little Vernalis, which plunged 18.1% on no particular news. Antisoma was down 4.7%, despite gaining 9.2% on October 16 after it announced encouraging news on its hormone refractory prostate cancer agent ASA404. Of the drug majors, GlaxoSmithKline was 3.0% lower, ahead of third-quarter results (see page 7), while AstraZeneca fell 4.7% on the news that the European Patent Office had made a final ruling on the firm's Symbicort (formoterol and budesonide) patent in favor of an appeal from several generic drugmakers (see page 6).