Stock Commentary - New York week to Feb 2, 2009

NEW YORK: equities started the reporting week to February 2 in positive spirit, helped by a rebound in the banking sector, but then turned into  decline, when worse-than-expected economic data saw investors take  profit. The Dow Jones ended the week 2.2% lower, with the drug and  biotechnology sector mixed, as 23 of the stocks tracked moved higher and  10 lower.

The worst showing came from Dow Chemical, after it posted a $1.5  billion fourth-quarter 2008 loss. This followed shortly after the firm  failed to sell a 50% stake in itself to Kuwaiti investors, thus  jeopardizing Dow's plans to buy Rohm & Hass. Ligand more than regained  its previous week's losses, caused by news of the Pfizer takeover of  Wyeth which might mean the loss of a deal with one of the firms  (Marketletter February 2), rising 15%, and benefiting from positive  preliminary results in a mid-stage clinical trial of its hypertension  drug PS433540. Ligand plans to purse partnership discussions for the  product, sold as Avapro (irbesartan) by drug major Bristol-Myers Squibb.  Medarex will get $1.0 million from MedImmune for the development of  MEDI-546 as a possible treatment for scleroderma (see page 21). Medarex  also said that it had received a Food and Drug Administration OK for an  early-stage study of MDX-1203 in people with advanced or relapsed renal  cell carcinoma and non-Hodgkin's lymphoma. The stock was up 10.2% for  the week. Gilead's stock moved up 7.2%, after reporting good  fourth-quarter 2008 results, and analysts saying they expect profits  for this year to increase by up to 14%. Strong sales of Truvada  (emtricitabine and tenofovir) and Atripla (efavirenz, emtricitabine and  tenofovir) helped fuel the positive numbers. Though positive earnings  news boosted Schering-Plough's stock after the close of the reported  week (see page 3), it ended the current week off 6.4% on an analyst's  prediction of a declining market share for Vytorin (ezetimibe and  simvastatin) because of questions about its benefits. Seamus Fernandez  of Leerink Swann downgraded the stock to market perform from outperform,  saying there are no major catalysts for financial growth in 2009. He  also pointed to a declining economy that will push more patients and  doctors to use generics.