Friday's Health Winners & Losers

Shares of Encysive Pharmaceuticals(ENCY) jumped 8% Friday after Cowen & Co. health care analyst Phil Nadeau predicted that Thelin, the company's proposed treatment for pulmonary arterial hypertension, will likely be approved and on the market in the first half of 2007.

In a research note Friday, Nadeau said the company wouldn't have submitted a response to a recent Food and Drug Administration approvable letter "unless it is very confident that the FDA will approve Thelin." The FDA issues approvable letters when a review of a drug application determines that a drug can be approved, pending submission of additional information. Shares of Encysive recently were up 52 cents to $6.83.

Shares of drug developer Pharmaxis(PXSL) soared 20% after the company said it was granted fast track status by the Food and Drug Administration for its cystic fibrosis drug Bronchitol. The designation, which is granted for experimental drugs intended to address unmet medical needs, allows an expedited FDA review of its marketing application through a rolling submission, instead of submission of the entire application at once. The drug has already been granted orphan drug status for rare diseases, which waives the company's application fee and allows for certain tax benefits and marketing exclusivity. Shares of Pharmaxis recently changed hands at $42, up $7.

Pharmaceuticals and chemicals giant Bayer(BAY) sold its H.C. Starck chemicals manufacturing subsidiary to private equity firms Advent International and the Carlyle Group for approximately 1.2 billion euros. The transaction value consists of about 700 million euros in cash and 450 million euros in debt. The divestiture reduces Bayer's net debt by about 1 billion euros, and results in an accounting gain of about 150 million euros. Subject to anti-trust approvals, the deal is expected to close at the beginning of 2007. Advent and Carlyle intend to take H.C. Starck public in three to five years. Bayer's shares fell 30 cents, or 0.6% to $51.20.

BioMimetic Therapeutics'(BMTI) shares rose after an analyst at AG Edwards increased his price target on the stock. Pharmaceuticals analyst Jan Wald now sees a 2006 loss of $1.27 a share on sales of $3.6 million in 2006, improved from his previous expectations of a $1.95 loss per share on sales of $3.5 million. For 2007, he expects a loss of $1.33 on sales of $5.7 million, up from a $2.42 loss on sales of $5.9 million. Accordingly, he increased his price target on the stock to $18 from $11. BioMimetic shares were up 39 cents, or 3.9%, to $11.90.

Among other health care stocks rising Friday were PDL BioPharma(PDLI), up 2.6% to $23.09, Encysive Pharmaceuticals(ENCY), gaining 8.9% to $6.87, Labopharm(DDSS), 3.7% higher to $6.10, Iomai(IOMI), whose shares were boosted 5.9% to $5.17 and Sangamo Biosciences(SGMO), up 5.1% to $7.90.

Meanwhile Abbott's(ABT) shares sank 1% to $47.08, St. Jude Medical(STJ) fell 1% to $37.40, and Boston Scientific's(BSX) shares were 0.7% lower to $16.42. Hospira's(HSP) shares fell 1.3% to $32.18 and SkyePharma's(SKYE) stock was down 1.6% to $4.41.

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