Stock Commentary - New York week to Oct 2, 2006

EUROPEAN: bourses were all up to some extent, with the focus continuing to be merger and acquisition activity although, for the reporting period to October 2, this was not pharmaceutically-oriented as had been the case in the previous two weeks. However, there was still an over-hang of M&A sentiment following through for drug and biotechnology issues. In FRANKFURT, there was a 3.1% decline for Altana, which announced the sale of its pharmaceutical business to Denmark's Nycomed albeit at a price lower than many observers had expected (Marketletter October 2). Schwarz, the subject of a $5.6 billion acquisition by Belgium's UCB (reported last week), continued to edge higher, with a 3.6% rise, despite a downgrade to hold from add by analysts at WestLB, who cut their price target on the stock to 83.80 euros. In BRUSSELS, there was a 6.5% rise for UCB, as investors viewed its proposed acquisition, as well as its R&D day announcements (Marketletter October 2), favorably. AMSTERDAM, where the AEX index rose 2% on the week to its highest level for the year, saw DSM move up 5.3%, after the group revealed a 750.0 million-euro ($956.0 million) share buyback program and a loyalty dividend. In ZURICH, which was up 1.3%, Actelion outperformed with a 5.4% gain, and Novartis rose 1.5%, helped by an overweight rating from analysts at Lehman Brothers, who have upgraded their price target on the Swiss drug major to 82 Swiss francs from 79 francs.

LONDON: share prices put in a stellar showing for the first three days, fuelled by a strong Wall Street due to better-than-expected US consumer confidence with the FTSE 100 ending the reporting week 2.8% higher overall, despite a downturn on the last two reporting days. The senior index even broke through the 6,000 barrier in morning trading on September 29, before dipping back. Little Antisoma leapt over 66% on a flow of good products news, including the presentation of positive Phase I results on its aptamer drug AS1411 for cancer at the European Society of Medical Oncology meeting in Istanbul, Turkey, and substantial Phase II survival benefits with its AS1404 in non-small cell lung cancer.