Stock Commentary - Europe - week to September 24, 2007

EUROPEAN: bourses had an exceptionally good start to the reporting week to September 24, rising strongly for the first two days on the back of Wall Street's performance. Despite no further positive incentives, all markets ended the week with significant gains. FRANKFURT's Xetra Dax was up 4.1%, while MorphoSys outperformed, with a 6.9% rise on the news that its cancer treatment, HuCAL Gold, had advanced into Phase I clinical trials, triggering a milestone payment from Swiss drug major Novartis. Going the other way was Evotec, which fell 6.1%, after announcing a $152.0 million stock deal to acquire US firm Renovis (Marketletter September 24). Drug majors Bayer and Merck KGaA hardly moved over the week. PARIS saw bioMerieux outperform the CAC 40's 4.7% increase, jumping 6.7% on the week, despite reporting a decline in first-half income, but helped by the news of a deal with Ipsen (Marketletter September 24). Sanofi-Aventis was barely changed.

LONDON: share prices were strong, with the FTSE 100 rising 4.6% on the week. Skyepharma leapt 12.9%, after the firm reported a reduction in its first-half loss and on the progress of its asthma drug Flutiform (formoterol and fluticasone; see page 4). Antisoma, up 9.4%, also benefited from recording a narrower loss, but similar news for Vernalis had the opposite effect, as that stock fell 7.1%, even after reporting good Phase I date for its obesity drug candidate V24343 (Marketletter September 24). XTL Bio declined 13.6%, largely on profit-taking following its recent strong performance. GlaxoSmithKline rose just 0.5%, while AstraZeneca moved 3.2% higher.