Slumping pharma stocks depress European markets

Slumping healthcare stocks pulled European markets lower on Thursday after US presidential candidate Hillary Clinton demanded price cuts on a successful drug and many investors awaited headlines from a big gathering of central bankers.

Healthcare stocks were a major weight on the FTSE 100, with Hikma, Shire and AstraZeneca falling between 1.4 per cent to 3.5 per cent. London's FTSE closed 0.28 per cent lower.

The losses followed Mrs Clinton's call for a lower price for Mylan NV's allergy drug EpiPen, which has become four times more expensive in the past decade.

The demand “serves to strike fear into the hearts of healthcare groups and their investors everywhere”, Mike van Dulken, head of research at Accendo Markets, said in a note.

DUBLIN

Overall, the Iseq dropped 10 points to close at 6,118, outperforming rival bourses in Europe. CRH rose 2.3 per cent to €29.71 after the construction company posted higher than expected first-half sales and profit.

The company’s share price, up about 8 per cent since the Brexit referendum, is hovering around highs not seen since 2007 amid speculation that it may rejoin the keenly followed Euro Stoxx 50 index next week.

Paddy Power Betfair, which fell 2 per cent on Wednesday after posting half-year losses of €55 million, was down another 2 per cent to €111.40.

Hotel group Dalata gave up gains from the previous session, falling 4.5 per cent to €4.33.

Packaging group Smurfit Kappa rose 2 per cent to €21.95.

LONDON

The FTSE 100 index was down 18.88 points to 6816.9 after Mrs Clinton hit out at the 480 per cent price hike of an allergy product owned by US pharma company Mylan.

The comments from across the Atlantic caused investors to take flight from London-listed drug stocks, with Hikma Pharmaceuticals and Shire dropping 78p to 2150p and 123p to 4902p respectively, while AstraZeneca was off 69p to 5011p.

Mining giant Glencore continued its dismal performance from the previous session when investors baulked at the size of its debt pile. Shares were 4.8p lower at 179.3p, after its net loss fell from £511 million to £279 million (€453 million to €247 million) in the half-year period.

Shares in Entertainment One plunged more than 14 per cent after broadcaster ITV gave up its takeover pursuit of the Peppa Pig-owner. Shares were down 35.7p to 215.1p after the broadcaster said on Thursday that it has withdrawn its proposal to take over the Canada-based firm after Entertainment One rejected an initial offer earlier this month.

EUROPE

European shares headed for their biggest drop in more than three weeks as a disappointing German sentiment report highlighted lingering concern about global growth before Federal Reserve chairwoman Janet Yellen's Friday address. The Stoxx Europe 600 Index slid 0.8 per cent to 342.05 in London, with all industry groups retreating.

On the flip side, Sunrise Communications jumped nearly 9 per cent after the Swiss telecoms firm posted a fall in core earnings that was narrower than expected and confirmed its guidance.

Among other sharp gainers, GFK soared 5.9 per cent after German weekly WirtschaftsWoche reported that its majority owner was looking at options, including a merger or sale.

NEW YORK

Wall Street was little changed on Thursday afternoon, as a drop in consumer stocks was offset by gains in technology companies as well as financials after two more Federal Reserve officials said interest rates can be raised.

Their comments followed the hawkish tone set by key Fed policymakers in recent days and came ahead of Yellen’s speech.

By early evening, the Dow Jones industrial average was down 19.17 points, or 0.1 per cent, at 18,462.31.

Mylan rose 2.3 percent to $44.16 after the drugmaker said it would reduce the out-of-pocket cost of its allergy treatment EpiPen. Tiffany rose 5.6 percent to $72.67 after the jeweller reported an unexpected rise in quarterly profit. The stock was the top percentage gainer on the S&P 500.

– (Additional reporting: Reuters/Bloomberg)