Wednesday's Health Winners & Losers

Shares of Kosan Biosciences(KOSN Quote) jumped Wednesday after the company announced a collaboration with drug giant Pfizer(PFE Quote) on a proposed gastrointestinal disease treatment.

Kosan will receive an upfront payment of $12.5 million and could receive up to $250 million in milestone payments and royalties on worldwide sales and other items. Kosan's shares gained 10.7% to $5.40, while Pfizer's stock was up 1.2% to $26.52.

Shares of specialty biopharmaceutical company Vernalis(VNLS Quote) rose 6.2% to $2.39 after the company announced the appointment of Genentech(DNA Quote) executive Ian Clark as a non-executive director.

Clark, who joined Genentech in 2004 and previously served as president of Novartis(NVS Quote) Canada, will join Vernalis on Jan. 1.

Shares of specialty pharmaceutical company EpiCept(EPCT Quote) gained 4.8% to $1.52 after the company said it's initiating an early human trial on its proposed cancer drug EPC2407. The drug could be used to treat cancers of the lung, gastrointestinal tract, ovaries and breast, the company says.

Northfield Laboratories(NFLD Quote) shares plummeted 54.8% to $5.16 following an announcement Tuesday that a trial on its proposed blood substitute PolyHeme failed to meet its goals. The use of PolyHeme was also linked to an increased risk of death, according to preliminary results.

The stock was downgraded to neutral from outperform by Cowen & Co. analyst Dr. Joshua Schimmer on Wednesday. Morgan Joseph analyst Dr. Eugene Trogan lowered his price target on the stock to $4 from $6.