Elan stock rises on news of stake deal worth $1bn

DUBLIN REPORT Iseq: 2,665.69 (-25.72) Settlement date: July 7th:PHARMACEUTICAL GROUP Elan, no stranger to large intraday share price movements, moved 19 per cent in the right direction yesterday, providing the big story of the day on the Iseq index.

Elan's stock shot up in value after it was announced that US drugmaker Johnson Johnson is to take an 18.4 per cent stake in the company for $1 billion as part of a deal under which it will take over some of Elan's research into the treatment of Alzheimer's disease. The stock closed at €5.70, up 91 cents, on high volumes, with one Dublin-based trader describing the deal as "very positive news for them".

The performance of Elan, which comprises 7 per cent of the index in terms of its market capitalisation, helped the Iseq to outperform other European indices on a generally poor day.

Disappointing jobs news emerging from the US in the form of subdued non-farm payroll data dragged down sentiment in Europe.

The Iseq slipped almost 1 per cent, but this was better than the 2.5 per cent fall on the FTSE 100 in London.

Building materials group CRHdropped 2 per cent to close at a price of €15.53. This was a good day though relative to its peers in the sector, following news that US construction spending fell back in May and was down almost 12 per cent in the first five months of 2009 compared to 2008.

The global stock markets showed little mercy to recession-struck airlines yesterday, with the likes of Lufthansa, British Airways and Air France all losing ground. Ryanairplunged 4.6 per cent to a closing price of €3.18.

Some of the food stocks such as Aryzta, C&C, Glanbiaand Kerrymanaged to finish the day with gains, but the financial stocks all fell back, with Bank of Irelandthe biggest casualty, dropping 8.2 per cent to €1.52.