Stock Commentary - Europe - week to Feb 13, 2006

EUROPEAN: bourses moved up and down during the reporting week to February 13, with a particularly strong showing on February 9, when a batch of good earnings reports boosted markets. The best-performing market was FRANKFURT, where Schwarz leapt 12.3%, after Dresdner Kleinwort Wasserstein initiated coverage of the firm at buy with a 72-euros price target, saying the second quarter figures should alert the market to the full potential of the company's Phase III products. Bayer was lower early in the period, on continued worries about its drug Trasylol (aprotinin; see page 20), but recovered later for a week-on-week gain of 1.8%. AMSTERDAM witnessed a 7.3% gain for Akzo Nobel, after the firm posted better-than-expected 2005 results and the news that it plans to float its drug unit (Marketletter February 13).

LONDON: saw good performance for little Acambis, which rose 8.9% on no particular news. Drug majors AstraZeneca and GlaxoSmithKline went in opposite directions, with the former declining 1.3% and the later up 3.7%, as investors continued to favor GSK because of its strong R&D pipeline. The news that AstraZeneca was withdrawing its controversial drug Exanta (ximelagatran; see page 19), came too late to impact its share price. Provalis fell back 8.6%, after announcing it would sell certain assets to Kogen (Marketletter February 6). SkyePharma, which has seen a great deal of volatility of late, moved 6.0% higher on the last reporting day, on the news that its ousted founder, Ian Gowrie-Smith had moved forward his departure. However, investor activists are still pushing for an Extraordinary General Meeting.