Stock Commentary - New York week to Feb 23, 2009

NEW YORK: equities saw yet more weakness, with the Dow Jones Industrial Average falling further and further below the psychologically-important  8,000 level, and close to breaching 7,000 toward the end of the  reporting period to February 23, with week-on-week decline of 9.4%.  Moreover, with the fourth-quarter financial reporting pretty much over,  there was little to spur interest in the drug and biotechnology sector,  where just four of the stocks tracked saw a rise while 29 fell.

Still benefiting from results was Mylan, which gained 9.1% after posting  a reduced full-year loss and noting that sales of its recent Merck KGaA  generics acquisition had risen 93% (see page 7). Off 27.7%, Affymetrix  stock saw yet further decline, as the weak economy continued to push  down sales while the company faces high restructuring and impairment  costs. Most analysts feel the firm will continue to face pressure in  this year's first half, though things could improve later  if the  company is aggressive about selling its genotyping and other analysis  products. Also Amylin shares dropped another 19.5%. Les Funtleyder of  Miller Tabak feels Byetta (exenatide) sales will not bounce back and  others point to growing potential competition for the drug from the  likes of Novo Nordisk's liraglutide and Roche's R1583, among others. Mr  Funtleyder also does not anticipate any upside from billionaire  investor Carl Icahn's interest in the company. On the plus side, the  once-weekly version of Byetta under development by Amylin and Eli Lilly  may be submitted for approval by mid-year. One of the few companies this  week that saw its stock move in a positive direction, Watson, up just  0.2%, achieved this feat by posting quarterly results that were better  than expected. It also said that it should see increases in profits and  revenues this year, based on approval of two drugs to treat bladder  conditions and on arbitration with Sanofi-Aventis about a distribution  deal for Ferrlecit (sodium ferric gluconate). Randall Stanicky of  Goldman Sachs feels that deal is not on as solid ground as Watson  indicates, and has kept his sell rating on the stock. Moreover, the  drugmaker is also doing more than just hinting that it will expand  outside the USA by acquiring foreign companies.