Stock Commentary - New York week to Dec 10, 2007

NEW YORK: despite a slightly weak start, equities climbed for the rest of the reporting period to December 10, with a particularly strong 1.5% upward burst for the Dow Jones on December 5 reflecting employment data, and leaving the index up 3.1% on the week. The drug and biotechnology sector was also strong, with 30 on the stocks tracked rising and just nine seeing a decline. The American Society of Hematology meeting was a catalyst for several of these moves (see pages 19-20).

Positive trial results for Velcade (bortezomib), presented at the meeting, pushed Millennium's stock up 8.5% for the week. The company has already reported stronger-than-expected sales for its only drug on the market, with analysts predicting US turnover will grow 20% this year and rise to $420.0 million domestically and $921.0 million worldwide by 2009. Johnson & Johnson, which barely moved, has marketing rights to the drug in more than 85 countries outside the USA. Possible links between anemia drugs and a higher risk of leukemia noted by Mayo Clinic researchers, combined with analysts' downgrades, sent Amgen shares 7.4% lower for the reported week. Joel Sendek of Lazard Capital Markets reiterated his sell rating and told clients that a meta-analysis of earlier trial data, also presented at the ASH meeting, suggested the higher risk for the drugs, which include Amgen's Aranesp (darbepoetin alfa) and Epogen (epoetin Alfa) as well as J&J's Procrit (epoetin alfa). Even before the release of the new data, Geoff Porges of Sanford Bernstein also downgraded the shares to market perform from outperform, telling his clients that the news leads him to believe that neither the earnings multiple nor the earnings outlook for Amgen will improve early on in 2008. Good news for Medarex and its two Investigational New Drugs for MDX-1342 was overshadowed at the very close of the reported week when Bear Stearns downgraded the stock to peer perform after a late-stage patient study for ipilimumab, being developed with Bristol-Myers Squibb, did not meet its primary goal in one of three trials (see page 28). The two firms still plan to meet with the FDA to discuss moving ahead with the drug. Medarex ended the week up 10.9%. B-MS dipped 0.7%.