Health Winners & Losers: Medtronic

Once again, health stocks were down in line with the broader markets, and with light news flow.

Big biotechs Celgene(CELG Quote) and Gilead(GILD Quote) were down 3.4% and 2.4%, helping to hold down the biotech indices. The Nasdaq and Amex indices were off by 1.6% and 1.2%, respectively.

One mover, Amylin(AMLN Quote) fell another $1.66, or 5.6%, to $28.10, after falling some 16% a day prior. Stanford Research downgraded Amylin to hold from buy, keeping a price target of $33, a day after regulators warned of two deaths possibly related to the diabetes drug Byetta, which Amylin is developing with Eli Lilly(LLY Quote).

The Food and Drug Administration said Byetta could be linked to six cases of severe pancreatitis, all of which required hospitalization. Two of the patients have died. The agency said its working with Eli Lilly and Amylin to add stronger more prominent warnings in the product label around the risk of these severe forms of pancreatitis.

Eli Lilly was off by just 23 cents, or 0.5%, at $47.28.

In clinical news, Vertex(VRTX Quote) and Johnson & Johnson(JNJ Quote) said they have begun a phase III trial, dubbed REALIZE, to study their experimental hepatitis C drug telaprevir. Shares were up 48 cents, or 1.7%, at $28.20.

Meanwhile, Dyax(DYAX Quote) shares, which added more than 10% Monday on positive study results gave back 8% on Tuesday.

In earnings, device maker Medtronic(MDT Quote) said Tuesday that it earned $747 million, or 66 cents a share, vs. $675 million, or 59 cents a share in the year-ago quarter.