Stock Commentary - Europe - week to April 17, 2006

EUROPEAN: bourses were all down significantly, falling sharply on the first reporting day, April 11, after the Italian election fiasco which pointed to political paralysis. This was followed by worries about high commodity prices in the Easter holiday shortened week to April 17. FRANKFURT's Xetra Dax fell 1.4%, hit by profit-taking since April 6, after the index made strong gains prior to that. Here, Schwarz Pharma was the highlight, rising 9.6%, on news of its out-licensing deal with US drugs giant Pfizer for fesoterodine, which includes an upfront payment of $100.0 million plus developmental and regulatory milestones, as well as royalties which could add up to a further $110.0 million. LION Biosciences drifted back 3%, after leaping more than 29% the previous week. PARIS's CAC 40 plunged 3.4% on the week, with bioMerieux down 2.7%, after the company said it expected to raise some $1.22-$1.83 billion to finance acquisitions (see page 2). ZURICH saw a poor performance from the drug sector, with only Roche managing a small, 0.7% rise, while Novartis fell 2.3% and Serono was down 3%, still suffering from the news that it had pulled out of any takeover talks (Marketletter April 17).

LONDON: share prices were virtually unchanged over the three-day trading week, with the FTSE 100 having notched up a five-year high on April 11. There was little news in the pharmaceutical sector and stocks tracked moved in a narrow range, with the best being a 3.2% rise for XTL Bio and worst a 3.9% decline for Acambis. Drub majors AstraZeneca and GlaxoSmithKline managed rises of 0.6% and 0.3%, respectively. Skyepharma went into reverse with a 3.8% fall.