Stock Commentary - New York week to June 23, 2008

NEW YORK: equities moved lower on four of the reporting days to June 23, with the Dow Jones falling below yet another psychologically-important level of 12,000 and down 3.5% on the week. Rising and falling oil prices and a negative housing market along with economic weakness continued to be factors. The majority of pharmaceutical and biotechnology stocks were down week-on-week, with 26 of those tracked falling and only 11 seeing a rise.

Wyeth stock headed up 11.1% after it and partner Ireland-based Elan released mid-stage data on bapineuzumab. The upward float should continue for both companies until detailed information is released at the end of July at the International Conference on Alzheimer's Disease. Nevertheless, some analysts felt that, because there were admitted "imbalances" in the small trial that could have skewed the results, investors should remain open-minded about the possibilities for the drug and for the associated stocks. Other analysts have a brighter picture, noting that the stock is already worth about $48, before any new products are valued in, and that it has a strong balance sheet, with good cash flow and strong dividends. It could also be a great potential takeover candidate, it was noted. With the dampening of the technology sector spreading to related sectors, Affymetrix shares continued to fall. The stock was off 14.3% for the week. It had a bad quarter because of competition and a lower outlook for drug development spending. The firm lowered its full-year figures several months ago. Trial news was not so good for Medarex. Pfizer discontinued a Phase III trial for tremelimumab after interim data indicated the trial would not show superiority to standard chemotherapy. Medarex, which was to receive royalties from Pfizer on the drug, fell 11.7% while the latter dipped 2.2%. David Windley of Jefferies told clients that Alpharma, with its unique business model that has its animal health sector funding its drug business, could have four new drugs by 2012. Also annual sales in the drug sector could be almost three times higher by 2011. He rates the company a buy with a $33 price target, noting that it is an attractive investment in a sector struggling to find direction, but the stock ended off 7.9% for the reported week.