Yesterday's Trading: Pharma fails to pep up Footsie
Shire sent pulses racing with an early leap of 52p before closing 23½p better at 878½p. Buyers dosed up with stock after Collins Stewart forecast 50% upside from present levels.
Struggle: Despite best efforts, pharmaceuticals could not help the Footsie
It backed that up by flagging the intriguing possibility that one day GlaxoSmithKline could acquire Britain's third biggest drugs group, which is currently valued at £4.9bn.
Shire recently entered a three-year deal with GSK to co-promote Vyvanse, the treatment for attention deficit hyperactivity disorder, for adults. The deal, which goes live this month, will see GSK provide 600 representatives, doubling the Vyvanse salesforce, to introduce the product to 70,000 new doctors.
Collins Stewart's analyst Emmanuel Papadakis believes Vyvanse will hit the upper target of management's £1.5bn-£2bn peak sales guidance by the end of the next decade, driven by the GSK deal and a European launch in 2011.
Shire forked out £1.3bn in February 2007 for US company New River in order to gain control of Vyvanse. CS's target price is 1255p.
AstraZeneca touched 2678p and ended 36p better at 2626p as fund managers continued to respond to the group's revelation earlier this week that its heart drug, Brilinta, had beaten its competitor, Plavix, in a major trial.
In the lower pharma leagues, hayfever specialist Allergy Therapeutics rose 2¼p to 20p amid rumours that the company is on the verge of renegotiating its debt. Vaccine delivery specialist Lipoxen added 2p at 14½p after receiving funding to apply its ground-breaking ImuXen technology to enhance the performance of a malaria vaccine.
Futura Medical, on the other hand, closed 4¼p lower to 21¾p on hearing of a delay in the manufacture of its erection-enhancing condom. Marketing partner SSL has decided to relocate condom production to Asia, which means the company will have to provide additional data to the EU regulator before being granted the CE mark required to sell the product.
A much worse-than-expected 0.4% fall in April US retail sales and downward revision of March's data trampled all over the green shoots of recovery.
As fund managers on both sides of the pond took profits, Wall Street dropped 181 points in the early stages, dragging the Footsie 94.17 points lower to 4,331.37. The FTSE 250 fell 252.73 points to 7,371.19.
Household products giant Unilever jumped 35p to 1506p after Charles Stanley upgraded from hold to accumulate following significantly better-than-expected first-quarter figures last week. The shares' valuation is comparable with that of Nestle but prospects are potentially better, the broker said.
A tidal wave of profit-taking after the sector's spectacular recovery from March lows left Royal Bank of Scotland a further 5½p down at 38p, Barclays 25¾p cheaper at 242¾p and Lloyds Banking 4½p off at 84.6p.
Selling ahead of today's first-quarter sales number left Prudential nursing a 38¼p fall at 409½p.
KBC Peel Hunt advised clients to sell Marks & Spencer ahead of Tuesday's annual results and the shares ended a ragged 12½p easier at 320½p. The broker forecasts pretax profits of £610m, down from £1bn last year. It expects the final dividend to be maintained at 6.7p, implying a 50% drop for the year.
Analyst John Stevenson says more recent trading has benefited from weak comparatives, Easter timing and warm weather. Next year the risk of tax rate increases and interest rate rises will slow the pace of recovery. For clothing exposure, he prefers both Debenhams, 6½p easier at 92p, and Next, 49p lower at 1501p.
ECO Animal Health advanced 12½p in a thin market to 192½p amid hopes that Aivlosin, its patented macrolide antibiotic, could be a treatment for influenza.
Buyers chased Petra Diamonds up to 57p on hearing that the high-profile Cullinan blue diamond was sold on Tuesday for £6.3m at Sotheby's Magnificent Jewels Auction in Geneva. It set a new price-per-carat record for any gemstone sold at auction. The Cullinan mine was acquired by a Petra-led consortium last year.
Symphony Environmental Technologies, the degradable plastics and waste-to-energy group, edged up 1p to 5⅞p. It has launched the world's first proprietary degradable film for snack foods with Organizacion Barcel, a subsidiary of Grupo Bimbo Mexico, one of the world's largest bakeries.
˜ Hefty selling left Playtech, which provides software for online casinos, down 26¾p at 448p. Evolution advised clients to bail out after being surprised to hear at the AGM that underlying growth has declined.
The group reported revenue down 1% in the first quarter of 2009 despite signing 15 new licensees in 2008 and five in the first-quarter of 2009.
The broker's target price is 301p.
Most watched Money videos
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- A look inside the new Ineos Quartermaster off-road pickup truck
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- Land Rover unveil newest all-electric Range Rover SUV
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Mail Online takes a tour of Gatwick's modern EV charging station
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Mini Cooper SE: The British icon gets an all-electric makeover
- Leapmotor T03 is set to become Britain's cheapest EV from 2025
- Blue Whale fund manager on the best of the Magnificent 7
- Mercedes has finally unveiled its new electric G-Class
- Australian miner looking to buy Anglo American set to...
- Top industrialist Sir Jim Ratcliffe blames high taxes for...
- RUTH SUNDERLAND: Stop cynical Royal Mail bid
- Cadbury owner Mondelez to face scrutiny over selling...
- CITY WHISPERS: Boss Cook-ing up a big sparkler to woo De...
- St James's Place facing humiliating exit from FTSE 100
- Sales at Bloomsbury soar thanks to the craze for...
- Revealed: The seven pensions savings habits that could...
- How to invest in the Ozempic weight loss boom - and pile...
- How does Shein make £2bn profit selling clothes from just...
- How can the UK catch back up with the US? HAMISH MCRAE
- Coca-Cola HBC's boss pocketed more than £320,000 in 'cost...
- Pressure on IMF to change gloomy forecast as Britain...
- Meet the foul-mouthed, Left-wing, working-class ex-City...
- Nationwide set to hand Fairer Share bonus worth £350m to...
- Former LV boss Mark Hartigan cashing in again as he tries...
- CQS NATURAL RESOURCES GROWTH AND INCOME: Golden...
- I've spent 36 years matchmaking the rich - what I've...