Stock Commentary - New York week to May 28, 2007

NEW YORK: equities notched up losses throughout most of the week to May 28, bucking the recent positive trend. Former Federal Reserve chairman Alan Greenspan warned of a fall in the Chinese stocks and a slowdown in the world economy, causing the Dow Jones to close down 0.1% on May 24. The negative sentiment continued the next day, with a 0.62% drop, although May 25 saw a turnaround with a 0.5% rise, aided by strong US economic data.

At the end of July, Biogen Idec's Tysabri (natalizumab) goes before two Food and Drug Administration advisory committees, which will look at expanding use of the drug in patients with moderate-to-severe Crohn's disease. The drug was re-approved last year for multiple sclerosis after its 2005 withdrawal because of links to a fatal brain infection. Some analysts feel Tysabri, if approved for the expanded indication, will only be a back-up treatment because of its safety profile and the other drugs already available to treat the disease. The stock was up 5.5%. After it beat expectations, Medtronic rose 5% for the week. The company saw a return to operating cash flow growth, after several years of weak cash flow generation, but some analysts feel that growth going forward probably will not be as robust as it has been in the past. Its cardiac rhythm disease segment grew only a couple of percent overall for the year, but expanded by double digits overseas, and the company is just now bringing its European-approved drug-eluting stents Endeavor to the US market. Though the stock was down 3.9% for the reported week, Abbott offered investors good news. The company reported that a long-term follow-up study showed that Crohn's disease patients on Humira (adalimumab) were 60% less likely to be hospitalized versus placebo after a year on the drug. Abbott also reported positive results from a clinical trial of a fully bio-absorbable drug-eluting stent, but it also began a voluntary recall of its ARCHITECT STAT Troponin-I diagnostic test to determine if a patient has had a heart attack. ArQule plans to offer up to $100.0 million in securities, according to an SEC filing which did not indicate which type of securities it would offer or how the proceeds would be used. The stock was off 2.1% for the week.