European Drug Shares Surge After U.S. Drugmakers Rally
Bloomberg News
September 2, 1998, 6:38 a.m. ET
European Drug Shares Surge After U.S. Drugmakers Rally
Amsterdam, Sept. 2 (Bloomberg) -- Drugmakers across Europe,
including Glaxo Wellcome Plc, rose after U.S. drugmakers led
yesterday's recovery in the Dow Jones Industrial Average, a
barometer for worldwide shares, and as Novartis' chief executive
rekindled hopes of consolidation in the industry.
Pharmaceutical companies were among those leading the
increase in the Bloomberg Europe 500 Index. Europe's largest
drugmaker Glaxo rose as much as 4.1 percent, as did Germany's
third-largest chemicals and drugmaker Hoechst AG.
The recovery follows five days of declines in European
stocks on concern that economic trouble in Russia and financial
turmoil in Asia may dent profits of European companies.
''We still see value in the sector,'' said Peter Blair, a
chemicals and drugs analyst at Salomon Smith Barney in London.
''In a bear market the defensive values of a pharma company are
useful. The long-term growth prospects for pharmaceuticals are
still good.''
Swiss drugmaker Novartis AG, the world's largest health-
care company, rose 2.1 percent. Chief Executive Officer Daniel
Vasella said in an interview with Finanz & Wirtschaft newspaper
he is ''optimistic'' that pharmaceutical sales growth will
accelerate in the third and fourth quarters of the year, and
said acquisitions are a ''priority.''
This comes after Roche Holding AG's Chief Financial Officer
Henri Meier said last month the second-largest Swiss drugmaker
also plans further purchases to boost its pharmaceuticals
division. Roche rose 3.8 percent.
''Favored pharmaceutical stocks are Glaxo and Zeneca, I
also like Hoechst,'' said Blair. ''In the longer term the
outlook for pharma is probably superior to chemicals. Certainly
for the companies that have a chemical and pharmaceutical
component, such as Hoechst, Bayer and Akzo Nobel, the market
undervalues the pharma component.''
Zeneca Group Plc, the third-largest U.K. drugmaker, rose
1.35 percent and Akzo Nobel NV, the maker of the world's best-
selling contraceptive pill, added 3.14 percent. German drug and
chemicals maker Bayer AG rose 3.8 percent.
Other gainers included Belgium's No. 1 chemicals and
drugmaker Solvay SA. The Brussels-based company, which makes PVC
plastic and antidepressant drugs, gained 5.0 percent.
--Rudy Ruitenberg in the Amsterdam bureau (31-20) 589 8507/ab |
