Stock Commentary - New York week toJune 26, 2006

NEW YORK: equities moved up and down during the reporting period to June 26, with the Dow Jones dipping at times below the 11,000 level, on worries about the country's economic slowdown and ahead of what it expected to be an interest rate hike by the Federal Reserve Bank in the forthcoming week, while at other stages boosted by takeover activity and some strong earnings reports. Pharmaceutical and biotechnology stocks were mixed, with 18 of those tracked rising, 22 falling and two unchanged.

Pfizer moved up 1.9% on June 26, though registering a 0.2% fall on the week, on the news that fellow US drug major Johnson & Johnson had paid top dollars - $16.6 billion - for the group's consumer health care business (see page 3). However, the news had the opposite effect on J&J, which fell 1.9% that day and over the week. The latter also suffered on reports that hospitals were using less stents, an area of J&J's business. Genzyme was the week's best performer, with a 16.4% rise, with the firm's stock boosted by good clinical trial results on its Synvisc (hylan G-F 20) and Hyalgan (sodium hyaluronate) in patients with osteoarthritis of the knee, which were presented at the European League Against Rheumatism meeting in Amsterdam, the Netherlands (see also pages 20-21). Shares of Amylin moved up 11.2% on news of a deal with Nastech to help develop a nasal spray version of exenatide, the active ingredient in the diabetes drug Byetta. Thomas Wei of Piper Jaffray is predicting 2006 Byetta sales of more than $350.0 million, even though Eli Lilly (down 0.2%) and Amylin are trying to slow sales until supply problems are solved. The current demand "problem" is a significant positive for long-term estimates, he said, noting that he would use any concerns near-term over the company's attempts to stop new patient starts as a buying opportunity. Mark Schoenebaum of Bear Stearns repeated his outperform rating on Amylin, noting that the stock represents a long-term value that could prove volatile in the near term. Accumulating shares on weakness would be a wise strategy for investors with a long-term investment horizon, he said. Cytogen fell 8.8% on the news that its chief financial officer had resigned.