Healthy Skepticism Library item: 7216
Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.
Publication type: news
Witkowski W.
Sector Wrap: Drugmakers Drop on Election: Drugmaker Stocks Continue to Tank As Democrats Take Back Control of Congress
Yahoo Finance 2006 Nov 9
http://biz.yahoo.com/ap/061109/sector_snap_drugmakers.html?.v=2
Abstract:
Shares of drugmakers dropped even further Thursday as Democrats officially took control of both houses in the next Congress.
Sen. George Allen (R-Va.) conceded to Democrat James Webb, effectively giving Democrats control of the House and Senate for the first time in 12 years, Thursday afternoon. Webb won the important seat by a margin of roughly 7,000 votes.
The American Stock Exchange’s Pharmaceutical Index, which tracks 15 major drug makers, closed down 9.22 points, or 2.6 percent, to 341.14. The Index fell 1.6 percent on Wednesday after Democrats won control of the House.
Jefferies & Co. analyst Arthur I. Henderson said Democrats will seek to change the Medicare Prescription Drug benefit so the government can negotiate lower drug prices directly with drugmakers, causing weakness in the sector.
However, UBS analyst Roopesh Patel said in a note that perceived threats to the sector will likely not come to fruition. While the Medicare changes and legislation allowing the reimportation of cheaper drugs from abroad are high on Democrats’ agenda, both measures will be met with presidential vetoes, the analyst said.
“While their bark may end up being louder than their bite, and while neither is likely to materialize under this President’s watch, these will still be viewed as a threat,” Patel said.
Some of the biggest losers in Thursday trading include Abbott Laboratories, AstraZeneca PLC, Pfizer Inc., Merck & Co., Schering-Plough Corp., GlaxoSmithKline PLC, Johnson & Johnson Inc. and Wyeth.
American depositary shares of AstraZeneca fell $2.03, or 3.4 percent, to close at $57.97, and ADS of GlaxoSmithKline dropped $1.77, or 3.3 percent, to $51.50 on the New York Stock Exchange.
Abbott shares fell $1.44, or 3.1 percent to close at $45.84. Shares of Merck slid $1.46, or 3.3 percent, to $42.88; Pfizer shares dropped 78 cents, or 3 percent, to $25.84; shares of Schering-Plough fell 66 cents, or 3 percent, to $21.58; Johnson & Johnson shares fell $1.84, or 2.7 percent, to $66.15; and shares of Wyeth dropped $2.28, or 4.5 percent, to $48.61. All stocks trade on the NYSE.
