Health Stocks in Motion

Shares of Rigel Pharmaceuticals(RIGL Quote) were among the worst-performing health-related stocks Thursday, plunging 63% after the drug developer's allergy medication failed a phase II clinical trial.

In the trial, R112 didn't meet the study's primary endpoint of showing a statistically significant difference in improving nasal allergy symptoms, when compared with a placebo, over a seven-day period. "We are disappointed in today's results," the company said. "These results are surprising given that the earlier phase II 'Park' study of R112 demonstrated a statistically significant reduction in the symptoms associated with the allergies." Beconase AQ, a GlaxoSmithKline(GSK Quote) product that was also compared in the study, was superior to the placebo treatment, Rigel said. Shares of Rigel were trading down $13.75 to $8.17.

Pediatrix Medical Group(PDX Quote) rose 4% after the contract medical services provider issued a 2006 earnings guidance above Wall Street forecasts. The company sees earnings of $4.76 to $4.86 a share, including items, and $5.35 to $5.45 a share on an adjusted basis. Analysts polled by Thomson First Call expect adjusted earnings of $5.22 a share. Pediatrix's guidance is based on same-unit revenue patient growth of 3% to 5% at neonatal intensive care units staffed by its doctors, as well as contributions from acquisitions. Shares were trading up $3.67 to $88.23.

Lexicon Genetics(LEXG Quote) shares rose 8% after the company announced an expansion of its drug discovery alliance with Genentech(DNA Quote). As part of the expanded agreement, which calls for advanced research, development and commercialization of new biologic drugs, Lexicon will receive $25 million in payments and funding over the three-year advanced research portion of the deal. The company also will receive payments if certain drugs are approved and commercialized by Genentech. "The expansion of our alliance with Genentech reflects the success of our intial collaboration and is a validation of our gene knockout approach to defining gene function for drug discovery," Lexicon said in a statement. Shares were up 32 cents to $4.10.