Stock Commentary - New York week to Feb 9, 2009

NEW YORK: equities started the reporting period to February 9, with a 1.8% bounce after four sessions of decline, but with the Dow Jones  Industrial Average then falling below the all-important 8,000 level the  next day. It then jumped 2.7% ahead of the weekend in anticipation of  President Barack Obama's financial rescue package aimed at stabilizing  the banking sector, leaving the index up 4.2% overall. The  pharmaceutical and biotechnology sectors were relatively strong, as  the year-end reporting season continued, with 26 of the stocks tracked  seeing a rise and just six falling. Ahead of the BIO CEO & Investor  Conference, the organization, along with Thomson Reuters, released  preliminary reports that that the majority of investors questioned feel  the biotechnology industry will rebound and outperform health care and  the rest of the market in 2009. Only 4% of those polled feel the sector  is overvalued, while 59% consider biotech undervalued. They also expect  more M&A this year.

Moody's has raised its rating on Schering-Plough to stable from  negative, pointing to a few quarters of favorable operating results  that have more than made up for declines in sales of Vytorin (ezetimibe  and simvastatin) and Zetia (ezetimibe) by growing other products and  effecting cost-cutting measures. While risks to the two drugs are not  over, it was noted, downward pressure has been alleviated by consistent  free cash-flow generation and steady debt reduction, there are few  patents expiring in the next three years and there is a good late-stage  drug pipeline. S-P's fourth-quarter earnings exceeded expectations  Marketletter February 9), after adding sales from an acquisition and  reducing costs. The stock was up 15% for the week. Ligand stock was up  9.7% after it told attendees at the BIO meeting that it has earned a  $1.0-million milestone payment from S-P for work relating to  Alzheimer's, on a product acquired through its buyout of Pharmacopeia.  Amylin shares continued to climb, up 11.6% for the reported week, as  Carl Icahn adds to his shares in the company and tries to replace board  members. King's stock was off 4.9% as it attempts to tighten its  operations following the Alpharma purchase and a court decision that  nullifies its patents for Skelaxin (metaxalone; page 6).