Wednesday's Small-Cap Winners & Losers

Levitt (LEV Quote) was flying high on word BFC Financial (BFF Quote), an investment firm that already owns about 17% of the Florida homebuilder, will buy its remaining shares in a stock-swap merger, which, based on BFC's $6.35 closing price Tuesday, is worth about $286 million, or $14.41 a share. Levitt stockholders will receive 2.27 shares of BFC for each Levitt share. Levitt was soaring $3.90, or 36%, to $14.78. BFC was slipping 4 cents to $6.31.

Palatin Technologies (PTN Quote) surged after pharmaceutical giant AstraZeneca (AZN Quote) agreed to pay the New Jersey-based company up to $310 million to develop drugs targeting melanocortin receptors. The melanocortin system, which is Palatin's main focus, has been shown to regulate homeostasis and can be used in treating obesity. Britain-based AstraZeneca will pay Palatin $10 million upfront and the rest of the total will consist of milestone payments. Palatin shares were gaining 37 cents, or 18.1%, to $2.42. AstraZeneca was recently up 20 cents to $55.75.

RedEnvelope (REDE Quote) widened its fiscal third-quarter profits to $5.3 million, or 56 cents a share, compared with last year's $4.1 million, or 43 cents a share. The analyst who follows the upscale-accessories retailer was looking for 49 cents a share, according to Thomson Financial. Revenue, at $57 million, was up 7.5% from a year ago but short of the $59.9 million estimate. Shares of the San Francisco-based company were rising $1.02, or 13.7%, to $8.46.