Stock Commentary - New York week to July 30, 2007

NEW YORK: saw a steady retreat throughout the week to July 30. The heavy losses started on July 26 when the Dow Jones Industrial Average fell 2.3% on the previous day, impacted by a set of disappointing quarterly financial results from major companies, as well as weak credit markets. The DJIA continued its decline, with a 1.5% drop the next day, July 27, as credit concerns continued, but rebounded with a 0.7% rise on the last reporting day.

Vertex shares were one of the few in the sector to show an upward tick for the reported week. Despite reporting a second-quarter loss, analysts were positive on developments for its hepatitis C drug. The company attributed its wider deficit to increased costs for mid-stage studies of telaprevir. Samad Akhtar of Bear Stearns reaffirmed his peer perform rating on the stock, but added that, though he is encouraged by the low relapse rate, he is waiting for news of talks with the Food and Drug Administration on a redesigned Phase III trial. Jennifer Chao of Deutsche Bank held her buy rating and said the drug had blockbuster potential, but lowered her price target to $35 from $53. The stock was up 11.5% for the week. It was diabetes drug news that pushed Amylin up 9.4% as bad press about GlaxoSmithKline's Avandia (rosiglitazone; see page 19) combined with high expectations for Amylin's Symlin (pramlintide acetate), a long-acting formulation of Byetta (exenatide), and an obesity treatment, Pramlintide, offset disappointment over lower-than-expected sales of Byetta. Bristol-Myers Squibb stock was off 10.7% for the week, Credit Suisse kept its neutral rating, while raising its target price from $27 to $29 and the EPS estimate for next year from $1.66 to $1.68. Cost-saving is working, analysts said and, even with problems related to currency effects, second-quarter expenses were either in line with or below estimates. Growth of branded drugs has returned now that there is no more generic Plavix (clopidogrel bisulfate) out there, noted Stephen O'Neil of Hilliard Lyons. He kept his neutral rating on the stock. Wyeth was off 13.3% after the FDA said at least one more year of clinical data was needed for Pristiq (desvenlafaxine). This means that the antidepressant, which is a new formulation of Effexor (venlafaxine), would not be available until after it loses patent protection.