Newspaper article The Evening Standard (London, England)

Glaxo Boosted by Outlook for New Cancer Treatments; Market Report

Newspaper article The Evening Standard (London, England)

Glaxo Boosted by Outlook for New Cancer Treatments; Market Report

Article excerpt

Byline: MICKEY CLARK

AS one of its spokesmen was quick to point out yesterday, shares of GlaxoSmithKline are at their highest in more than a year.

In fact, the drugs giant was one of the better performers among the top 100, which is just as well considering how much of our pension money is tied up in its shares.

Unfortunately, what the company forgot to remind me was that they are still way short of the 2110p you would have paid for them five years ago. Investor confidence in drug companies is not what it was.

There are too many concerns about generic competition, adverse side-effects, regulators, new drug pipelines and legal actions.

Yesterday's boost to Glaxo was provided by brokers Merrill Lynch and Credit Suisse First Boston, both in bullish mood after taking a look at the group's new cancer treatments, including Cervarix.

Merrill has repeated its buy recommendation and 1400p target. CSFB is also a buyer.

Cervarix is a treatment for cervical cancer while Lapatinib is a general cancer treatment and "115" is designed to tackle low levels of blood platelets.

Merrill says this will be a busy year for Glaxo, which has to negotiate a number of clinical trials. CSFB agrees and points out Glaxo will find itself headto-head with US rival Merck, which is developing its own cervical cancer treatment jointly with Sanofi-Aventis for a market that could be worth up to [pounds sterling]21 billion over the next nine years. It expects more data on both treatments throughout 2005 but reckons Cervarix will be the more profitable of the two.

As a result, it has raised its forecast on sales of the drug to $4 billion ([pounds sterling]2.1 billion) from $1 billion.

Rival AstraZeneca led bluechips higher with an increase of 86p to 2159p, helped by reassuring comments on fat-busting drug Crestor. …

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