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High rise

Shire enjoyed a 15 per cent share price jump on news that the FDA has given its new hyperactivity drug conditional approval

The stock market pushed ahead with the FTSE 100 breaking strongly through the important psychological resistance mark of 6,000, in the wake of the Dow Jones Industrial Average index hitting an all-time high.

US equities were lifted by a sharp fall in the price of oil and increasing hopes that the rising interest rate cycle in the US is over. Expectations that third-quarter earnings from US companies will be good have also helped drive share prices higher, more than offsetting geopolitical concerns about North Korea's claims to have undertaken a nuclear test.

In the pharmaceutical and biotech sector, Shire Pharmaceuticals was the star with an almost 15 per cent jump, leading the way for the FTSE 100 index' good rally on Monday that swept it into 6,000 territory. Conditional approval from the US Food and Drug Administration (FDA) for its new hyperactivity drug NRP104, an improved version of its top-selling Adderall XR, set off the share price run taking it to a five-year high.

Takeover speculation at Shire mounted following the FDA's decision on NRP104, adding fuel to the share price's explosive upward move.

The firm's new hyperactivity drug is forecast to have peak sales of around $1bn and is intended to replace Adderall XR, which loses patent protection in 2009. This drug is due to be launched in the second quarter of 2007, assuming labelling issues have been resolved.

Shire will share its profits from the product with its US partner in the venture, New River Pharmaceuticals.

Early days
GlaxoSmithKline (GSK) attracted some buying interest following speculation that it would make a big acquisition and rumours that it has held merger discussions with Novartis, the Swiss drug group.

GSK, however, beefed up its portfolio of over-the-counter drugs through buying CNS, a US consumer healthcare group, for $566m. CNS makes Breathe Right nasal strips and FibreChoice dietary fibre supplements.

The group also said separately that it has filed for EU approval for Tykerb, its breast cancer drug. It has already filed for approval in the US.

Tykerb is a potential rival drug to Herceptin, a drug for advanced breast cancer made by Roche.

Shares in Ark Therapeutics moved ahead smartly on Tuesday morning after the group announced that it had signed a pilot distribution and marketing agreement for Kerraboot, its novel wound care device for leg and foot ulcers. The exclusive agreement with US medical products distributor, Health Care Logistics, will run initially for one year.

Steady ascent
GW Pharmaceuticals, the maker of drugs derived from cannabis, enjoyed a useful rise thanks to its house broker Investec maintaining "now is the time to buy" ahead of further major trial results due before the end of the year.

The stockbroker's positive view comes after a recent presentation by GW to institutional investors on a site visit. Investors had already started to show interest in the shares ahead of positive news from the trials, before Investec made bullish noises.

2nd September 2008

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