Health Stocks in Motion

Shares of Smith & Nephew(SNN Quote) were among the worst-performing health-related stocks Tuesday, falling 6% after the medical technology company cut its full-year guidance.

The company now expects orthopedics sales growth of 17%, down from previous guidance of 18%. Wound management sales growth is now expected to be 5%, down from earlier guidance of 6%. "Sales growth over the summer has been below expectations, partly influenced by Hurricane Katrina during August," the company said. Trading margin is expected to be about 20.6%, while earnings growth is expected to be between 12% and 13%.

Previously, the company said that margins would approach 21% and that earnings growth would be in the midteens. Analysts polled by Thomson First Call are expecting full-year earnings of $2.20 a share on sales of $2.62 billion. Shares were trading down $3.16 to $46.54.

Chattem(CHTT Quote) rose 2% after the seller of health products raised its third-quarter earnings outlook. The company now expects earnings of 55 cents a share on sales of $68 million. Previously, the company said that it would earn 52 cents to 54 cents a share on sales of $68 million to $70 million. Analysts had been expecting earnings of 52 cents a share on sales of $70 million. For the full year, the company expects adjusted earnings of $2.08 to $2.10 a share on sales of $278 million to $280 million. Previously, the company forecast earnings of $2.06 to $2.10 a share on sales of $278 million to $282 million. Shares were trading up 64 cents to $38.18.

Shares of Novavax(NVAX Quote) rose 11% after the company said that it would collaborate with New Jersey-based Wave Biotech on the development of a commercial scale production process of Novavax's pandemic flu virus vaccine and other biological products. "We are very pleased to be able to work with Wave Biotech as we proceed to expand the production of our pandemic and seasonal flu vaccine candidates," Novavax said in a statement. "The process is reliable and can be readily scaled up to meet the needs of large populations." Financial terms of the collaboration were not disclosed. Shares of Novavax were trading up 16 cents to $1.67.