Stock Commentary - New York week to September 24, 2007

NEW YORK: equities started the reporting week to September 24 lifted by a larger-than-expected, 50 basis-point, cut in interest rates by the Federal Reserve Bank, seeing the Dow Jones leap 2.5% on September 18. After that, the index meandered around, to close up 2.7% overall, despite a decline on the last day amid thin trading as the dollar hit a new low against the euro. The Dow was also boosted by a strong showing in the oil sector, after crude prices hit a record $83.32 a barrel high. Pharmaceutical and biotechnology stocks were generally higher, with 29 of those tracked rising and 10 falling.

Affymetrix saw its stock price rise 7.1% over the week on news of an outperform rating from Robert W Baird, who told clients it was maintaining its rating on the stock though reducing its estimates of earnings per share for next year from $0.96 to $0.51 and also dropping the target price from $34 to $31. The company will meet its guidance for this year, the broker told clients, but going forward, numbers have been revised to reflect a shift in royalties from Illumina's genotyping/gene expression sale in the USA from 2008 to 2009. Valeant, up 5.8% on the week, has launched Bedoyecta, the top nutritional supplement in Mexico, in the USA through Latino independent grocers and major retailers serving ethnic communities. The company has also begun offering a rebate card to Parkinson's disease patients using Zelapar (selegiline HCl). As for Valeant's outlook, Megan Murphy of Lazard Capital Markets has a hold rating on the stock, noting the former ICN likely will look for licensing or partnering deals for retigabine and viramidine ICN 3142 or taribavirin. The company needs to make a decision on whether to continue development of the latter drug, she told clients, while a Phase II trial for retigabine and partnerships will also boost the stock. King Pharmaceuticals' stock dropped another 5.1% during the reported week. The firm is still suffering as the result of a decision that allows Lupin to produce a generic version of Altace (ramipril), co-marketed by King and Sanofi-Aventis. King plans to file a motion for a rehearing of the case. Altace sales accounted for $163.0 million of the firm's $467.0 million second-quarter net revenue.