Today's Health Winners and Losers

Shares of Pharmacopeia(PCOP Quote) were among the best-performing health-related stocks Tuesday, soaring 33% after the biotech company announced a drug discovery alliance with Cephalon(CEPH Quote).

As part of the pact, Pharmacopeia will receive an upfront fee of $15 million from Cephalon. "The primary objective of the alliance is to identify active molecules and bring them forward to clinical proof of concept, yielding novel candidates for drug development in various therapeutic areas," Pharmacopeia said.

Cephalon will be in charge of identifying promising compounds. Once a compound is identified, Pharmacopeia will be responsible for medicinal chemistry and primary biology and Cephalon will provide biology support. "Cephalon has been very successful at producing proprietary lead series against novel targets, so we are excited to be able to establish this alliance with Pharmacopeia," Cephalon said. Shares of Pharmacopeia recently were trading up $1.29 to $5.25, while shares of Cephalon rose 11 cents to $57.22.

Varian Medical Systems(VAR Quote) rose 1% after the medical device company's Trilogy linear accelerators received Food and Drug Administration marketing clearance for an expanded range of medical conditions. "With this new clearance, physicians can begin to provide Trilogy treatments for functional lesions like trigeminal neuralgia and other non-cancerous conditions," the company said. "The prior FDA clearance for the Trilogy device was limited to benign and malignant cancers, and arteriovenous malformations." Shares were up 55 cents to $46.88.

Shares of Abaxis(ABAX Quote) slipped 2% after the company said it agreed to end its distribution pact with Henry Schein(HSIC Quote). The split is effective immediately. Distribution of Abaxis' veterinary products through Henry Schein accounted for about 14% of Abaxis' total business during fiscal 2006, the company said.

"We believe that the loss of sales from the Schein organization will be principally offset with increased sales in our other domestic sectors, as well as increased international sales," Abaxis said. "We expect to meet our internal quarterly and annual financial targets." Shares were trading down 44 cents to $17.28.