A Few Drug Stocks Find Buyers

There was a lot to like among pharmaceuticals Tuesday, with several names popping up on good news despite a generally down day for tech stocks.

Standing out was Cytogen(CYTO Quote), a biopharmaceutical company that entered a marketing agreement with General Electric(GE Quote) for a prostate cancer imaging system. The method uses Cytogen's ProstaScint imaging agent with GE's Infinia Hawkeye imaging device, and it could also be used to map colon and ovarian cancers. Cytogen shares surged $2.42, or 41%, to $8.28.

Another small company aligning with a heavyweight was Applied Molecular Evolution(AMEV Quote), which signed its third contract with Eli Lilly(LLY Quote) to provide technology to optimize two potential protein drugs. Applied Molecular will get an upfront payment from Eli Lilly, as well as milestone fees and royalties on any products that result from the collaboration. Applied Molecular shares rose 49 cents, or almost 13%, to $4.29.

Eli Lilly had some favorable news of its own. The company announced that a new study suggests patients with acute schizophrenia reap gains from its drug Zyprexa, with symptoms "improving significantly" in advanced cases or cases with a history of "medication noncompliance." Shares of Eli Lilly gained $1.59, or 2.4%, to $68.66.

Biotech player Amgen(AMGN Quote) rose after the company received news the Food and Drug Administration could soon allow its rheumatoid arthritis drug Enbrel to be marketed as a treatment for spinal arthritis.

A preliminary panel within the FDA recommended the treatment, saying the benefits outweigh the risks involved, Reuters reported. The FDA usually follows its panels' decisions. The stock gained 93 cents, or 1.5%, to $65.05.

Two others to climb were Genzyme(GENZ Quote) and Dyax(DYAX Quote). Genzyme will exercise its option to buy a 50% stake in Dyax's DX-88 program for treatment of hereditary angiodema, which is currently in phase II of clinical trials. Genzyme rose 5 cents, or 0.1%, to $42.79, while Dyax rose a more dramatic 28 cents, or 7%, to $4.28.