Stock Commentary - New York week to April 9

NEW YORK: equities moved higher during the holiday-shortened reporting period to April 9, with the Dow Jones closing up 1.5%, helped on the last day by positive employment data and takeover activity in the wider market. The majority, 33, of pharmaceutical and biotechnology stocks tracked increased, with just five falling and one unchanged over the week.

The week's best performer was Vertex Pharma, which leapt 13.0%, still benefiting from a recent analysts' upgrade and ahead of the firm presenting data on its oral hepatitis C drug telaprevir at the European Association for the Study of the Liver, being held in Barcelona, Spain. Also rising strongly was ArQule, with an 11.0% gain, helped to some extent by Adam Feuerstein's Biotech Mailbag. This said he liked ArQule, noting that "it seems to have the lead in development of c-met inhibitors for solid tumors," and recently received late-breaker status for an oral presentation at the forthcoming American Society of Clinical Oncology meeting in June. Going the opposite direction, Ligand Pharmaceuticals plunged 26.2%, impacted by a downgrade from First Albany analysts from buy to neutral. They cited as the basis for this view the failure of Ligand's Targretin (bexarotene) to increase survival during Phase III trials of front-line therapy in non-small cell lung cancer. Shares of ImClone rose 4.3% on the week, boosted by positive data for its drug Erbitux (cetuximab), with results of a first-line Phase III study showing it increased overall survival in patients with recurrent and/or metastatic squamous cell carcinoma of the head and neck. However, the rise during the reporting week was later wiped out, after the drug failed in a Phase III pancreatic cancer trial (see pages 23 and 24).

Of the drug majors, Wyeth was strong, with a 4.6% week-on-week rise, after the company said that the US Drug Administration had completed a re-inspection of its Guayama, Puerto Rico, plant. Wyeth said it believed it is in a position to submit adequate responses to the inspection observations. It also retained an earlier rise on the news of completing the buyout of its Japanese subsidiary Wyeth KK from partner Takeda (Marketletter April 9).