SKYEPHARMA- TECHNOLOGIES - Huge Potential 2005:

Evening Standard, London, Market Report Column
2005-10-21

By Sarah Marks, Evening Standard, London

Oct. 21--AstraZeneca provided one of the few talking points in a subdued market today as the drugs giant unveiled promising results from a new study on manic depressives.

Patients suffering from bipolar disorder who took AstraZeneca's Seroquel, currently used to treat schizophrenia, showed a significant improvement.

Astra, which has already been discussing Seroquel with the US Food and Drug Administration, said it would file for a US licence before the end of the year.

According to Astra, up 14p at 2595p, between 3 percent and 4 percent of the adult population suffers from bipolar disorder. However, the true additional income it might derive from a new licence is difficult to measure as Seroquel is already being used by some doctors to treat the illness despite the lack of a licence.

The sector also drew support from a broker's note issued by Seymour Pierce that tipped Astra, rival GlaxoSmithKline, Novartis, Amgen, Wyeth and Bioject Medical Technologies as likely candidates for a takeover offer from Pfizer. It reckons Pfizer has a $50 billion (£28 billion) war chest and estimates a major merger could result in cost savings of 5 percent of pro-forma sales.

Second-liner SkyePharma put on a strong showing, up 1 3/4p at 38p,with analysts attributing today's gains to recent overselling.

At the other end of the scale, the London market is increasingly attracting smaller drugmakers from overseas keen to raise their exposure to institutional investors.

Today saw the first day of trading for Bangladeshi manufacturer Beximco Pharmaceuticals. The company sells copycat versions of bigger firms' blockbuster drugs cheaply for export to poorer countries. It also manufactures under contract to European drug majors such as Glaxo and Novartis, and expects sales to rise from an estimated £26.6 million this year to £80 million by 2008. With a book-building price of 60p giving a market capitalisation of £58 million, Beximco rose to 65p.