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In sight

The FTSE 100 Index has a clear view of the 6,000 mark again after a promising start to a traditionally poor month

The FTSE 100 Index, that bellwether of the stockmarket's health, has 6,000 firmly in its sights again as US employment figures for August soothed fears that the US economy is slipping back. Dealers are convinced that the US Federal Reserve Bank will keep US interest rates on hold at its next meeting on September 20. There is also hope that the more benign US scenario will help to keep UK interest rates at their present level for a while longer.

September is normally the worst month for shares - as against August, which is traditionally a good month - so the bullish start to the month has been unusual. Pharma stocks rose along with the market, with GlaxoSmithKline (GSK) outperforming the pharma sector after analysts at Merrill Lynch speculated on the positive results that are expected from a study into GSK's key diabetes drug Avandia.

The British pharmaceutical sector has provided fertile ground for the increasing flood of Asian entrepreneurs generating wealth three times faster than the UK economy as a whole, according to Barclays Business Banking. Between 1998 and 2005, the wealth amassed by Britain's top 200 Asian businessmen soared by 69 per cent compared with Britain's gross domestic product growth of just 23 per cent.

Ark Therapeutics' share price rises on Cerepro news
Ark Therapeutics, the biotech gene therapy company, saw a 4.25p rise in its share price to 94p, after announcing progress on the road to regulatory approval with a medicine for brain cancer. The medicine, Cerepro, which has passed through phase II trials, is being developed to prevent cancer returning to the brain after a tumour is removed via an operation.

Ark announced it has now successfully made a batch of Cerepro, which not only meets commercial standards but is also manufactured to comply with European regulatory standards. The European medicines regulator, the European Medicines Evaluation Agency (EMEA), will now decide whether to probe further into Cerepro or grant marketing approval.

As there are no gene-based drugs or medicines on the global marketplace, excluding China, the EMEA is constructing its policy towards gene therapy drugs as it moves forward. The agency is having to do this in the face of lively controversy over gene therapy, which alters people's genetic make up.

Other news on the gene therapy front created headlines. Trials conducted by the US National Cancer Institute showed gene therapy had cured skin cancer in two male sufferers of the disease in a trial involving 17 patients.

Ark's shares had earlier risen 8 per cent after announcing positive results from trials of Trinam, its gene therapy product focused on stopping blood-vessel blockages in kidney dialysis patients.

Innovata pins hopes on new inhaled insulin product
Innovata is pinning its hopes on its experimental dry powder pulmonary insulin inhaler, Q-Dose. Bristol-Myers Squibb had invested £15.8 m developing the Innovata product but handed back the rights to it when it shifted away from the diabetes market. Innovata reckons Q-Dose will compete effectively with Pfizer's rival product, Exubera, and has the advantage of being more compact. Exubera is the size of a litre bottle of water while Innovata's new product is down to mobile phone size.

Alltracel Pharma drives ahead
Alltracel Pharma, the wound-care product maker, posted a Ä2.97m loss for the year ending December 2005 as against a much biggest loss of Ä5.38m in the previous year. Turnover soared from Ä4.58m to Ä19.24m. The results include a first contribution, over nearly a year, from Westone, the oral-care products distributor bought back at the beginning of 2005.

Westone added in sales of Ä165.5m and profits of Ä1.96m to the latest Alltracel Pharma results, helping losses from the wound care side of the business to fall back from Ä5.83m to Ä4.06m. This year, first and second quarter sales are buoyant and this should lead to a better result for Alltracel in 2006.

Novartis links up with Entelos
Novartis is linking up with Entelos, the Californian company with a London listing that makes computer models to learn how drugs will affect human patients. After the TGN -1412 trial at Northwick Park Hospital, where a monoclonal antibody had a disastrous effect on six young men, testing on `virtual patients' is becoming more popular. Entelos has already worked in collaboration with other major pharmaceutical companies such as Roche and Johnson & Johnson.

Malcolm Craig is the author of 14 books on different aspects of successful investment ranging from the stockmarket to gold, and from overseas property to gilts. He is one of the country's most respected investment commentators.

2nd September 2008

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