Stock Commentary - New York week to Dec 3, 2007

NEW YORK: equities, after a previous volatile week, gained ground in the reporting period to December 3, with a more than 4% two-day advance seeing the Dow Jones regain the 13,000 level it had recently lost. Investors were buoyed by hopes of an interest rate cut following remarks by the Federal Reserve Bank's vice chairman, Donald Kohn. However, the last trading day saw a small dip, as concerns about the economy and corporate financial results returned. Pharmaceutical and biotechnology stocks had a stellar week, with 34 of those tracked advancing and just five seeing a fall.

Ligand Pharmaceuticals was the star performer, leaping 21% on the news of positive Phase II clinical trail data for Promacta (eltrombopag), a drug discovered by the firm and now being developed with UK drug giant GlaxoSmithKline. Alpharma shares edged their way up 4.4% on speculation that all or part of the company may be up for sale, following in the path of other recent takeovers in the generic sector. Unconfirmed rumors have suggested that India's Ranbaxy and Wockhardt have bid for parts of the US firm, which did comment that it was still looking for "strategic alternatives" but has not signed any definitive agreements. Alpharma did not define exactly what strategic alternatives were being considered. Standard & Poor's upgraded the stock to hold from sell and raised the target price by $7 to $26. The research firm told clients that while it feels Alpharma should be valued below peers, based on products and pipeline, it thinks its present market cap at one times sales appears attractive. A report in the Journal of Clinical Oncology noted that patients with some forms of metastatic colorectal cancer can experience significant regression of their liver metastases with ImClone's Erbitux (cetuximab). However, on the negative side, Katherine Kim of Banc of America downgraded the stock to neutral from buy, with a target price of $50, down from $61. She feels investors have high expectations for Erbitux but that it is of limited use in untreated non-small cell lung cancer and is not likely to get a large share of the market from Avastin (bevacizumab) because Genentech's product is more effective and less expensive. ImClone's stock was up 10.7%.