Monday's Small-Cap Winners & Losers

Health stocks predominated in small-cap trading Monday, with acquisition news sending several names higher.

1-800 Contacts (CTAC Quote) leapt 19.7% to $24.02 after private-equity firm Fenway Partners agreed to acquire the Utah-based contact lens distributor for $24.25 a share, or about $340 million. The deal is expected to close in the second half of fiscal 2007.

Diagnostic substances maker Digene (DIGE Quote) surged more than 30% to $58.27 after Qiagen (QGEN Quote) agreed to buy the Maryland-based company for some $1.6 billion in cash and stock. The transaction should close in August or September. Dutch-based Qiagen dropped 6.9% to $16.09.

And Inverness Medical Innovations (IMA Quote) will take out Cholestech (CTEC Quote) in a stock-swap merger worth around $21.02 a share, or $326 million (on the basis of Inverness' latest closing price). Cholestech soared 17.6% to $19.72; Inervess lately lost 3.7%.

Elsewhere, KMG Chemicals (KMGB Quote), of Houston, reported 70% higher earnings year over year -- 34 cents a share, or $3.8 million -- in the quarter ended April 30. Two analysts polled by Thomson Financial were seeking 21 cents a share. KMG also said David Hatcher has resigned as chief executive, to be replaced by Chief Operating Officer Neal Butler, though Hatcher will remain chairman of the board. KMG shares catapulted 26.2% to $19.19.

Among small-cap laggards, however, GenVec (GNVC Quote) plummeted 31.3% after a phase II/III study of its TNFerade product showed no statistically significant tumor-response difference from standard care alone in pancreatic-cancer patients. The drug also induced 74% longer survival rates vs. standard care alone, but shares of the Gaithersburg, Md., biopharma slid $1.41 to $3.10.