SHIRE withstood the retreat in the FTSE 100 after a US pharmaceuticals rival scrapped plans to develop a competing hyperactivity treatment.

Shares in Nasdaq-listed Cephalon fell 10 per cent late on Wednesday after the Pennsylvania-based company said that it would halt development of its experimental Sparlon drug after the decision of the US Food and Drug Administration not to approve it.

The US regulator rejected the drug — designed to treat children and adolescents with attention deficit hyperactivity disorder (ADHD) — after requesting new safety data on Sparlon, which it had first rejected in March after a patient participating in trials developed a potentially dangerous skin rash. JPMorgan responded by repeating its “outperform” recommendation on Shire.

Although the US broker had not expected Sparlon to compete head-on with Shire’s best-selling Adderall XR treatment, it said Sparlon not being on the market at all was a positive for the Basingstoke-based company. Shire also found support from Wednesday’s second-quarter figures from Noven Pharmaceuticals, which included prescription data on Daytrana, a novel skin patch for treating ADHD.

Citigroup took comfort from Noven’s comments that Daytrana, which the US company manufactures and Shire has the rights to and sells, is off to a “very good start”. The shares put on 2p at 856p, a creditable performance on a day in which only one quarter of FTSE 100 constituents finished higher on the session.

Even that showing would have seemed strong when the stock market opened, when the revelation of a foiled plot to blow up airliners mid-flight sent the FTSE 100 down 107.9 points, temporarily wiping £26 billion off leading shares. However, an early rally on Wall Street saw the benchmark index come to rest 37.1 behind at 5,823.4.

In fact, it was a profit warning from Deutsche Telekom that proved a greater drag on the index in sending heavily weighted Vodafone down 4½p to 112p, or nearly 4 per cent. Shareholders in Europe’s biggest mobile telecoms operator were spooked by Deutsche’s plans to slash tariffs at its T-Mobile division by 60 per cent to stem the loss of market share. JPMorgan highlighted the risk of downgrades to Vodafone’s profit forecasts and downgraded the shares from “neutral” to “underweight”.

But the US broker sent Corus Group, up 2¾p to 382p, in the other direction, advising clients to buy with a 505p target ahead of first-half results from the steel producer on August 30.

Wolseley, the distributor of building materials, with an extensive US presence, gave up 23p to £10.74 on disappointing third-quarter results from Toll Brothers, the Pennsylvania-based housebuilder, which cut its estimate of the homes it expects to build in 2006 for the fourth time this year.

Next weakened 8p to £16.42 as Shore Capital moved from “hold” to “sell”, noting that the clothing retailer’s summer sale has been materially larger than previous years.

• NEW YORK: Wall Street withstood the news of a terror plot. With strong corporate earnings reports and a sharp drop in oil prices, the Dow Jones industrial average closed 48.20 points up at 11,124.40.

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