Euro Drug Stocks Up On Warner-AHP Report
Wednesday November 3 8:23 AM ET
By Jonathan Birt, European pharmaceuticals correspondent
LONDON (Reuters) - An unconfirmed report that two of the U.S.'s biggest drugs groups could be in merger talks to form a new international champion sparked a rally among U.S. and European drug stocks Wednesday.
The Wall Street Journal, citing people familiar with the situation, said Warner Lambert Co and American Home Products Corp (NYSE:AHP - news) were in advanced talks which could lead to an announcement of a $65 billion deal as soon as Thursday, though last-minute failure could not be ruled out.
Shares in Warner-Lambert (NYSE:WLA - news), the U.S's ninth-largest group in terms of global prescription drug sales, traded up $6 9/16 in pre-opening New York dealing, while AHP, the U.S. number five, was up $3 5/8 at $54.
The report had a knock-on effect in Europe's fragmented drugs industry, with the DJ Stoxx index of Europe's blue chip pharma stocks rising 2.17 percent, helping lift the broader market from early losses. The charge was led by a 4.36 percent gain in SmithKline Beecham Plc (NYSE:SBH - news), the Anglo-U.S. player whose ranking has slipped in the face of rival mergers, and which is seen as a highly attractive target.
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